Baltimore v. The Supervisors Ant) Sheriff Of Marshall County.

• Decision Date: 31 January 1869
• Citation: 3 W.Va. 319
• Court: West Virginia Supreme Court
• Parties: "Tak Baltimore & Ohio R. R. Co. v. The Supervisors ant)Sheriff of Marshall County.

3 W.Va. 319

Tak Baltimore & Ohio R. R. Co.

v. The Supervisors antSheriff of Marshall County.

Supreme Court of Appeals of West Virginia.

January Term, 1869.

1. Although the charter of an incorporated company may be forfeited, yet

the government which granted it may not choose to enforce the forfeiture and may give it validity by recognizing its existence, and by the extension of further franchises; and when the company accepts the provisions of such extension the former grant of incorporation must give way to it, wherever the provisions are inconsistent.

2. Property cannot belong to an incorporated company without being vested

in it, and the respective shareholders in such an incorporated company constitute the company, and, therefore, property belonging to a company is vested in the shareholders in their corporate capacity and not as individuals or natural persons, and is consequently taxable in the name of the company.

9. The 7th section of the act of the general assembly of Virginia, passed March 6th, 18-17, f held to mean that taxes may be assessed whenever the net income of the entire road of the B. & O. E. R. Co. shall exceed six per centum per annum on the capital invested, and not when the net income on that portion of the roau being within the State of Virginia, and West Virginia since its creation, exceeds that amount on the capital invested in «aid States of Virginia and West Virginia. Also that the net income for the year 1803-61 did exceed six per centum on the capital invested.

4. The question as to when the property of the B. & O. R. R. Co. became taxable under the proviso of the said 7th section, is a question of fact, to be determined, if disputed, by a resort to the judicial tribunals of the State. No act or resolution of the legislature is required by the terms of the proviso, nor would be conclusive of the fact and binding on the company.

?This cause was argued at the July term, 1868, before Judges Brown and Maxwell, Judge Harrison being absent, but was not decided until this term.

f "Sect. 7. Be it further enacted, That the stock, property and profits of said company, so far as the same may be or accrue within this commonwealth, shall be subject to general taxation in like manner and on the same footing with other similar companies within this State: Provided howerer, that said taxing power shall not be exercised until and unless the net income of the said Baltimore and Ohio Bailruad shall exceed six per centum per annum upon their capital invested."

5. As the condition under which the taxing power was to be exercised had

happened, and no legislative declaration was necessary or could be binding on the company, there was no violation of the charter in assessing taxes on the property of the company and hence no interference with vested rights.

6. It was not error in the court below to refuse to direct a reference to a mas-

ter, or an issue to a jury, to ascertain what the net income of the road was, in this case, as it sufficiently appears from the facts in the case.

7. The grant of privileges to a corporation is to be construed strictly against

the corporation and in favor of the public; and the right of taxation will not be held to be surrendered unless the intention to do so is manifested by words too plain to be mistaken:

8. The phrase "general taxation" in the 7th section of the act of March 6th,

1847, held to mean that the property of the company waB liable to all taxation for State, county and local purposes. I

The questions arising in this case were principally upon the construction of the provisions of the statutes incorporating the B. & O. R. R. company. The material sections of those statutes are given by the judge who delivered the opinion of the court, in which opinion the merits of the controversy are substantially stated. Some questions, however, arose on the pleadings and proofs which require a more extended notice here.

It was proven that the B. & 0. R. R. Co. extended its main stem from Baltimore, in Maryland, to Wheeling, in this State, a total distance of 379 miles, 246 miles whereof was in West Virginia and 136 miles in Maryland That the cost of the road was estimated on the 30th day of September, 1863, including the rolling power and real estate, to be 24, 945, 093 dollars and 17 cents, of which 14, 795, 093 dollars and 17 cents was the cost of the road, rolling stock, &c, in West Virginia; that the net income of the company as ascertained by John King, the auditor (and witness) thereof, from the West Virginia portion of the line for the year ending January 31st, 1864, was 964, 274 dollars and 71 cents.

There were other statements proven of the capital invested by the company, and also of the capital stock issued by it, for several years anterior to this latter period, but it does not appear to be necessary to give them here as the court only regarded the valuation and income of the road for the year which the taxes were assessed. It also appeared by the proofs in the cause that the company declared a dividend of three per cent, in March, 1863, on 13, 111, 525 dollars of capital stock, and two dividends of three per cent, each (one extra), in October, 1863, on 13, 117, 500 dollars of capital stock; also a divideut of four per cent, in April, 1864, on 13, 122, 600 dollars of capital stock, and a further dividend of four per cent, in November, 1864, on 13, 124,-400 dollars.

The answer of the defendant, in the court below, showed that on the 30th day of September, 1862, the capital invested in the B. & O. R. R. Co. was 32, 650, 643 dollars and 17 cents, and that the net income for the year ending then was 159, 416 dollars and 64 cents; the answer further stated that they were unable to give the amount of capital invested and the net earnings for thcyearsl863 and 1864; but it was proven that the gross earnings of the company on the main stem of the road for the year ending January 31st, 1864, was 5, 823, 025 dollars and 73 cents, and that the cost of working the entire main stem for that time would not exceed or equal.sixty per cent, of the gross earnings.

(r. H. Lee for the appellant. Lamb and Stanton for the appellees.

Maxwell, J. The Baltimore and Ohio railroad company was charged on the personal property books of the assessor for the first or upper district of the county of Marshall for the year 1864 with property of the value of 315, 000 dollars, and was charged on the said books on account of the said property with a State tax for general purposes of the sum of 945 dollars, and with a further State tax for the support of free schools of the sum of 315 dollars, and with a county tax or levy of the sum of G, 331 dollars and 50 cents, making in all the sum of 7, 591 dollars and 50 cents. "When the sheriff of said county was about to levy for and proceed to collect the said taxes so charged the said company obtained an injunction restraining him from levying for and collecting the said taxes. The case came on to be heard in the circuit court of Marshall county at the April term, 18G7, of said court, when the court dissolved the injunction and dismissed the complainants' original and amended bills so as to allow the said sheriff to proceed with the collection of said taxes. But the said company not being satisfied with the decree dissolving the injunction has appealed to this court to have the case reviewed.

The petitioner assigns six different causes of error in the decree complained of, all denying in substance that the property of the said petitioner is liable for either the State or county' taxes charged on the said property.

The Baltimore and Ohio railroad company was chartered by an act passed by the general assembly of the State of Maryland on the 28th of February, 1827.

The 22d section of said act provides, "That if the said road shall not be commenced in two years from the passage of this act and shall not be finished within this State in ten years from the time of the commencement thereof, then this act shall be null and void."

This Maryland charter was confirmed by the general assembly of-Virginia with certain conditions and restrictions, not material to* this case, by an act passed on the 8th day of March, 1827.

In 1836, 1837, 1838 and 1839 other acts were passed by Virginia authorizing conditional subscriptions to the work of the company, the act of 1838 also extending the time for the completion of the work in Virginia until the 4th day of July, 1843, upon the conditions mentioned in said act. The conditions mentioned in these several acts were never complied with, nor the subscriptions therein provided for, made, but the load was nevertheless completed in 1843 as far as Cumberland. The work upon the road in Virginia between Harper's Ferry and Cumberland must have becu done after the expiration of the time limited in the charter without any extension thereof, except the extension mentioned in the act of 1838, which never took effect, because it was dependant upon Conditions never complied with.

In 1844-45 and in 1845-46 other acts were passed proposing terms and conditions upon which the company might complete its road through Virginia, but neither of these acts was accepted by the company.

On the 6th of March, 1847, another act was passed which was accepted by the company, and under which the company completed its road through Virginia, subject to such parts of its original charter as remain unaltered.

It is claimed here in behalf of the appellees.that the act of March 8th, 1827, constitutes no part of the charter of the Baltimore and Ohio railroad company, but that the act of March 6th, 1847, and the general railroad law referred to in the last named act constitute the charter of said company for the reason that the road was not completed in the time named in the act ot 1827, whereby the act became null and void, and for the further reason that if the said act did not become null and void it was entirely superseded by the act of 1847.

In the case of...