West Wisconsin Railway Company v. Board of Supervisors of Trempealeau County

• Decision Date: 01 October 1876
• Citation: 93 U.S. 595,23 L.Ed. 814
• Parties: WEST WISCONSIN RAILWAY COMPANY v. BOARD OF SUPERVISORS OF TREMPEALEAU COUNTY
• Court: U.S. Supreme Court

93 U.S. 595

23 L.Ed. 814

WEST WISCONSIN RAILWAY COMPANY v. BOARD OF SUPERVISORS OF TREMPEALEAU COUNTY.

October Term, 1876

ERROR to the Supreme Court of the State of Wisconsin.

Argued by Mr. P. L. Spooner and Mr. Matt. H. Carpenter for the plaintiff in error, and by Mr. S. U. Pinney for the defendants in error.

MR. JUSTICE SWAYNE delivered the opinion of the court.

The facts of this case are substantially the same with those of Tucker v. Ferguson, 22 Wall. 527, and the question presented for our determination does not vary materially from the one there decided.

The United States granted certain lands to the State of Wisconsin to aid in the construction of railroads in that State. The State transferred a portion of the lands to the plaintiff in error for the purpose and upon the terms and conditions specified by Congress.

Patents for designated quantities of the land were to issue to the company as successive sections of the road of twenty miles each were completed. In the mean time, the title of the company was inchoate. On the 2d of April, 1864, the legislature of Wisconsin passed an act, whereby, in the first section, it was declared that all the lands in question the title whereto should become vested in the company should be exempt from taxation for ten years from the passage of the act. The second section declared that such lands should become subject to taxation as soon as they were sold, leased, or conveyed by the company. The last clause of this section is as follows: 'Provided that said lands may be mortgaged for the purpose of raising funds to build said railroad without being subject to taxation for the time aforesaid.'

In August, 1868, the company executed a mortgage of its roadway and rolling-stock, and of all the lands it might thereafter acquire, as security for its bonds, to the amount of $4,000,000, maturing at different times. By another act, of the 16th of March, 1870, the exemption from taxation was further extended for ten years. But it was declared: 'And it is further provided, and this act is upon the express co dition that if said railroad company shall not have built their said road within two years from the passage of this act, then, and in that case, this act shall be null and void: provided, that this act shall not apply to Pierce County.'

The bonds secured by the deed of trust were issued in successive series, in the years 1868, 1870, 1871, and 1872. The company realized from the four millions of bonds about $3,200,000, and applied the amount received to the construction of their road. A part of the road was completed in 1868, forty-five miles in 1870, and the entire line during the month of November, 1871. By an act of the legislature of March 15, 1871, it was enacted that the lands in Trempealeau County belonging to any railroad company 'not used for road-bed or depot purposes shall be liable to taxation the same as other real estate.' By an act of March 24, 1871, the exemption act of March 16, 1870, was amended so that it should not apply to Trempealeau County. The tax in question was levied in 1871, and the sale for its non-payment complained of was made in 1872. The exemption created by the act of 1864 was to terminate in 1874. That specified in the act of 1870 was then to commence.

The plaintiff in error insists that these acts—the lands of the company having been mortgaged pursuant to the first, and the road having been completed within the time limited by the second created a contract within the contract clause of the Constitution of the United States, and that, therefore, the two acts of 1870 abrogating the exemptions were void.

In the argument here, a large share of the discussion was devoted to sect. 1, art. 2, of the constitution of Wisconsin. In our view, it is unnecessary to consider that branch of the case, and it will not be further adverted to.

One who has examined this case cannot look through Tucker v. Ferguson, as reported, without being struck with the similarity of the points and arguments, as well as the substantial identity of the facts, in the two cases. The latter case was carefully considered in all its aspects by this court. It is unnecessary to reproduce at length the views then expressed. In that case, 22 Wall. 575, we said:——

'The taxing power is vital to the functions of government....