Adams v. Yazoo & Mississippi Valley Railroad Co

• Decision Date: 20 December 1897
• Citation: 75 Miss. 275,22 So. 824
• Parties: WIRT ADAMS, STATE REVENUE AGENT, v. YAZOO & MISSISSIPPI VALLEY RAILROAD Co
• Court: Mississippi Supreme Court

22 So. 824

75 Miss. 275

WIRT ADAMS, STATE REVENUE AGENT, v. YAZOO & MISSISSIPPI VALLEY RAILROAD Co

Supreme Court of Mississippi

December 20, 1897

December 1897

FROM the circuit court, first district, Hinds county HON. ROBERT POWELL, Judge.

Wirt Adams, state revenue agent, an officer authorized by statute in certain cases to sue for and recover unpaid taxes-state county, levee or municipal--when taxpayers have wrongfully escaped payment of the same, brought this suit against the Yazoo & Mississippi Valley Railroad Company, to recover of it the municipal taxes which it should have paid, as plaintiff claimed, for the years 1893, 1894, 1895 and 1896, to the cities, towns and villages of Jackson, Yazoo City, Greenwood Flora, Thornton, Tchula, Cruger, Lexington and Durant. The defendant railroad claimed an exemption from municipal taxes under the eighth section of its charter, which was in these words:

"Be it further enacted, That, in order to encourage the investment of capital in the works which said company is hereby authorized to construct and maintain, and to make certain in advance of such investment, and as an inducement and consideration therefor, the taxes and burdens which this state will and will not impose thereon, it is hereby declared that said company, its stock, its railroads and appurtenances, and all its property in this state, necessary or incident to the full exercise of all the powers herein granted, not to include compresses and oil mills, shall be exempt from taxation for a term of twenty years from the completion of said railroad to the Mississippi river, but not to extend beyond twenty-five years from the date of the approval of this act; and when the period of exemption herein prescribed shall have expired, the property of said railroad may be taxed at the same rate as other property in this state. All of said taxes to which the property of said company may be subject in this state, whether for county or state, shall be collected by the treasurer of this state and paid into the state treasury, to be dealt with as the legislature may direct; but said company shall be exempt from taxation by cities and towns."

The railroad had not been completed to the Mississippi river when the suit was brought.

The judgment of the circuit court was, upon demurrer to the declaration, favorable to defendant, and plaintiff appealed.

Judgment reversed, and cause remanded.

Williamson & Potter, for appellant.

The right of the Yazoo & Mississippi Valley Railroad Company to the exemption provided by the act of its incorporation, as to state and county taxes, has heretofore been decided by this court against the company, the court holding that the exemption was conditioned on the railroad reaching the Mississippi river. Y. & M. V. R. R. Co. v. Thomas 65 Miss. 553. This decision was affirmed by the supreme court of the United States. Y. & M. V. R. R. Co. v. Thomas, 132 U.S. 174.

The question presented by this case is, did the legislature, by the last paragraph of section eight of the charter, intend to grant perpetual and unconditional exemption from taxation by cities and towns? "Statutes or charters exempting property, persons or corporations from the common burdens of taxation are to be strictly construed. The intention of the legislature to grant the immunity claimed must be clear beyond a reasonable doubt, and the state must be given the benefit of every doubt arising as to the legislative intent." 25 Am. & Eng. Enc. L., 157; Hoge v. Railway Co., 99 U.S. 348; Sutherland Stat. Con., 364; Ice Co. v. Greenville, 69 Miss. 86; & M. V. R. R. Co. v. Thomas, 65 Miss. 553. "A claim of exemption from county and municipal taxation cannot be supported any more than a claim of exemption from state taxation, except upon language so strong as that, fairly interpreted, no room is left for controversy." Bailey v. Maguire, 22 Wall. [ U.S.], 215. "Doubt is fatal to the claim." Fertilizer Co. v. Hyde Park, 97 U.S. 667.

From a fair reading of the act under consideration it would appear that, provision having been made in section eight for the collection of state and county taxes by the state treasurer, and these having been thus specially mentioned, and as there might arise a doubt as to whether municipal taxes were covered by the exemption, on the doctrine that the mention of one would exclude the other, and, to make this certain, the clause, "but said company shall be exempt from taxation by cities and towns, " was added. Not that the company should have perpetual and unconditional exemption from municipal taxes, as is contended, but that it shall likewise [that is, upon the terms and conditions before made in the section], be exempt from municipal, as well as other taxes. This is borne out by the object and spirit of the act. The purpose of the legislature, in granting the exemption, was to induce the building of the road to the Mississippi river, as held in the Thomas case by this court and by the supreme court of the United States in the same case, where the latter court says: "In our opinion, it cannot be doubted that the principal object of the grant to the company was the building of a line across the state from the Chicago Railroad to the Mississippi river." Y. & M. V. R. R. Co. v. Thomas, 132 U.S. 174. It cannot be held that it was the purpose of the legislature to relieve the corporation from any of the burdens of taxation without some object or reason, and the apparent object and reason of the exemption was to induce the company to build its railroad to the river, not only to open up that section of the country, but to bring the river and the railroad into competition as common carriers, and to connect them. An act must be construed according to its reason and object. Love v. Taylor, 26 Miss. 567; Grand Gulf Bank v. Archer, 8 Smed. & M., 151. We further cite, as pertinent to the case, Painter v. Trotter, 10 Smed. & M., 537; Dixon v. Doe, 1 Smed. & M., 70; Clements v. Anderson, 46 Miss. 581; Ellison v. M. & O. R. R. Co., 36 Ib., 572; Verdin v. Bowers, 55 Ib., 1.

W. A. Henry, on same side.

The case of Y. & M. V. R. R. Co. v. Thomas et al., 65 Miss. 553, is really decisive of the present case. The opinion states the law most tersely, saying: "As taxation is the rule and exemption the exception, the intention to create an exemption must be expressed in clear and unambiguous terms; and it cannot be taken to have been intended, when the language of the statute on which it depends is doubtful or uncertain."

The charter of appellee is a most liberal one. It granted unusual rights, privileges and powers. But its terms clearly demonstrate that, among its many other purposes, the central idea was the building of a railroad from some point on the main line of the Illinois Central, as it is now known, to the Mississippi river; that it would extend to this mighty artery of commerce. That this was the legislative idea there can be no doubt; and this was the inducement to exemption from taxation. By the eighth section of the charter it is declared that said company, its stock, its railroads and appurtenances, and all its property in this state necessary or incident to the full exercise of all the powers therein granted, not to include compresses and oil mills, shall be exempt from taxation for a term of twenty years from the completion of said road to the Mississippi river, but not to extend beyond twenty-five years from the date of the approval of the act. Could it be more plainly expressed that the exemption from taxation, not from state and county, but from all taxation, municipal as well as state, levee and county, does not commence until the completion of the road to the Mississippi river? Do the words at the bottom of the section, "but said company shall be exempt from taxation by cities and towns, " nullify the clear expression above quoted? Taking the whole section, is it clear that the legislature meant to exempt the "company" from municipal taxes from the passage of the act, and for all time to come? Is the intention to create such exemption "expressed in clear and unambiguous terms?" Is not "the language of the statute on which the exemption depends, " doubtful or uncertain? If so, then, under the case in 65 Miss. supra, the exemption cannot be taken to have been so intended.

Again, if the words "but said company shall be exempt from taxation by cities and towns" is to prevail over the previous clear expression in the section, then the question arises, what is exempt thereby? Is the "company" only exempt from, say, privilege, income, or other like tax, or, in addition, is all of its property, of every kind and description, including its compresses and oil mills, its depots, its railroads and rolling stock, its valuable real estate, such as it owns in Yazoo City, for instance, much of which is not used for railroad purposes, its express, insurance and storage business [in which it may engage under section nine of its charter] and its telegraph line? If exempting the company exempts the whole of its property also, then why the particularity in the first part of the section, "that said company, its stock, its railroads and appurtenances, and all its property in this state, etc., shall be exempt, " etc.? Surely it cannot be that the legislature used the word "company" synonymously with the foregoing expression. I respectfully submit that the question of the exemption in this case is, to put it most strongly against the appellant, involved in that doubt and uncertainty that authorizes the court to uphold the taxing power, and that a reversal of the case should be entered.

Mayes & Harris, for appellee.

The question involved in this case is a very narrow one, and its consideration can be dismissed in a few words. The...