Yazoo & Mississippi Valley Railroad Co. v. Thomas

• Decision Date: 12 November 1888
• Citation: 65 Miss. 553,5 So. 108
• Court: Mississippi Supreme Court
• Parties: YAZOO AND MISSISSIPPI VALLEY RAILROAD COMPANY v. S. B. THOMAS ET AL., Tax Collectors

5 So. 108

65 Miss. 553

YAZOO AND MISSISSIPPI VALLEY RAILROAD COMPANY v. S. B. THOMAS ET AL., Tax Collectors

Supreme Court of Mississippi

November 12, 1888

APPEAL from the Chancery Court of Hinds County, HON. WARREN COWAN Chancellor.

Under an act of the legislature, approved April 3d, 1888, entitled "An Act to provide for the assessment and collection of past due and unpaid taxes on railroads which have escaped the payment of taxes," an ad valorum tax, for the years 1885, 1886 and 1887, had been assessed against the property of every description belonging to the Yazoo & Mississippi Valley Railroad Company, and the tax collectors, severally of the counties of Hinds, Madison, Yazoo, Holmes, Leflore and Grenada were about to proceed with the collection of the same when, on July 17th, 1888, the railroad company filed the bill in this case against such tax collectors, for an injunction prohibiting the collection of the tax.

The bill states as follows:

"Orator was incorporated by an act of the Legislature of the State of Mississippi, February 18th, 1882, entitled, 'An Act incorporating the Yazoo & Mississippi Valley Railroad Company, and declaring its powers;' orator accepted the charter, organized under it, and proceeded with the work of constructing its railroad and branches, beginning at the city of Jackson, in Hinds County, having its initial point at the Chicago, St. Louis & New Orleans Railroad, and proceeding through parts of the counties of Hinds, Madison and Yazoo, to Yazoo city; and thence through Yazoo county into Holmes county, with a branch to the town of Lexington in said county, and by another line of road to Greenwood, in Leflore county, and thence into Grenada County; that its road to Yazoo City was completed and opened for traffic on the 1st of May, 1884, in length 45 miles, and the remainder of said road and branch was finished for traffic by Sept. 1st., 1886, the aggregate mileage being 140 miles."

"The enterprise, so chartered and projected, was deemed hazardous in a financial view by the Legislature and the projectors, as may be best comprehended by reference to the preamble and the second and eighth sections of the act of incorporation, viz.:

"PREAMBLE.--Whereas the construction of railroads to, in, through and along the Mississippi River basin, and the Yazoo and Sunflower basins penetrating these and other alluvial lands in this State west of the Chicago, St. Louis and New Orleans Railroad, and connecting them by railroad and branches with other railroads, west, east, north and south, is deemed, and hereby declared to be a work of great public importance, and, in strict accordance with the policy and the interests of this State, should be encouraged by legislation and liberality; and whereas, the physical difficulties of constructing and maintaining railroads to, across, along or within, either the Mississippi, Sunflower, Deer Creek or Yazoo bottoms or basins, or the other alluvial lands herein referred to, are such that no private company has, so far, been able to establish a railroad and branches developing said basins and alluvial lands, and connecting them with the railroad system of the country; now, therefore, in order to induce the investment of capital in the construction and operation of such a railroad and branches, and thus develop the resources of the State," etc.

"SECTION 2. Be it further enacted, That said corporation shall also have, and it is hereby authorized and invested with, the right and powers to build and construct, and thereafter to use and operate, own and enjoy, a railroad or railroads, with one or more tracks, into, along and across that part of the State of Mississippi between the Mississippi River and Chicago, St. Louis and New Orleans Railroad, or such lines as shall be deemed best by the board of directors of the company hereby chartered; one of the lines, or a branch thereof, to reach the Mississippi River at or near a point opposite Arkansas City, if practical, so as to connect such point, on the east bank of the Mississippi River, with some point or points on the line of the Chicago, St. Louis and New Orleans Railroad; one of said lines, or a branch thereof, to pass through Yazoo City, Mississippi; and said company shall have the right and power, and are hereby authorized, to build one or more branches or lines of railroad between the Mississippi River and Deer Creek, and between the Deer Creek and the Sunflower River, and between the Sunflower River and the Yazoo River, in the direction of, or to, the north line of this State, and extend the same, or any one thereof, in the direction of, or to, the south boundary line of this State, as shall, from time to time, in the judgment of the company, be deemed proper; and shall also be authorized to construct and operate such spurs and laterals, from or along such main line or branches, not exceeding 100 miles in length, as may, from time to time, be necessary or proper to fully develop said country lying west of the Chicago, St. Louis and New Orleans Railroad and east of the Mississippi River, in this State; and the said company, as soon and whenever, from time to time, they have located said line or lines of railroad, or branches, spurs or laterals thereto, or any of them, shall file in the office of the Secretary of State a statement showing the general line thereof, so far as the same has, up to that time, been located.

"SECTION 8.--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 or 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, not to extend beyond twenty-five years from the date of this act, and, when the period of exemption herein prescribed shall have expired, the property of said railway company shall 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 subjected in this State, whether for county or State, shall be collected by the treasurer of this State and paid into the treasury, to be dealt with as the legislature may direct; but said company shall be exempt from taxation by cities and towns.

"Orator states and charges, on belief and legal advice, that its exemption from taxation began at the date of its charter, and will continue for twenty-five years from that date; that it was the intention of the legislature, in said 8th Section, to grant a period of exemption which should begin at the date of the approval of the act of incorporation absolutely. Its duration was to be contingent. It was not to extend beyond twenty-five years from that date, and twenty years from completion of a line or branch to the Mississippi river. It was to be terminated by the lapse of twenty years from said completion of a line or branch to the Mississippi river, or by the lapse of twenty-five years from the date of the charter, whichever should first happen. There was to be an extreme outer limit beyond which the period would not extend, but short of which it might be made to end, to wit; by the lapse of twenty years from the completion of a line or branch to the river, should that prove practicable."

The bill further charges that its property is not subject, according to its charter, to the taxes the collection of which is sought to be enjoined, and that the proceedings for the collection of the same are without legal authority; that to apply the act of 1888, in relation to railroads which have escaped taxation, to complainant's road, "will be to violate the charter contract which exempts orator's road from taxation; that such application of said act is the same as a repeal or revocation of the grant of exemption, and therefore in violation of the Constitution of the United States forbidding such violation; and that to impute a legislative intent to compel orator to pay taxes, is to render said act of 1888 an act impairing the obligations of a contract and void, because in violation of the Constitution of the United States, as well as the constitution of this state."

The prayer of the bill is that, on final...