Chicago v. State of Missouri Guffey

• Decision Date: 07 March 1887
• Parties: CHICAGO, B. & K. C. R. Co. v. STATE OF MISSOURI ex rel. GUFFEY, Collector, etc
• Court: U.S. Supreme Court

120 U.S. 569

7 S.Ct. 693

30 L.Ed. 732

CHICAGO, B. & K. C. R. Co. v. STATE OF MISSOURI ex rel. GUFFEY, Collector, etc.

March 7, 1887.

L. T. Hatfield and A. W. Mullins, for plaintiff in error.

B. G. Boone and John P. Butler, for defendant in error.

HARLAN, J.

The judgment which this writ of error brings up for review affirms the liability to taxation, in Missouri, for state and county purposes, of what was formerly known as the Central North Missouri Branch of the St. Joseph & Iowa Railroad, more recently named the Linneus Branch of the Burlington & Southwestern Railway Company, and now owned by the Chicago, Burlington & Kansas City Railroad Company, a corporation organized under the laws of Missouri. The latter company claims to have succeeded to all the rights, priviliges, and immunities granted to the St. Joseph & Iowa Railroad Company in its charter of 1857, among which was an exemption of its stock from taxation for 'state and county' purposes. As the construction which the supreme court of Missouri places upon certain legislation, enacted after the charter of the St. Joseph & Iowa Railroad Company was granted, is inconsistent with the exemption claimed, the controlling question on this writ of error is whether the local statutes, as interpreted and applied by that court, impair the obligation of any contract which the company had with the state, and thereby deprive its successor, the plaintiff in error, of any rights secured by the constitution of the United States.

That question mainly depends upon the construction of an act of the general assembly of Missouri entitled 'An act to aid in the building of branch railroads in the state of Missouri,' approved March 21, 1868. That act took effect from its passage, and is as follows:

'(1) Any railroad company in this state authorized by law to build branches, and wishing to avail themselves of the provisions of this act, shall, by its board of directors, pass, and cause to be entered upon its records, a resolution setting forth such desire, and designating the name under which such branch shall be built, its point of intersection with its main line, and general course, a certified copy of which resolution shall be filed with the secretary of state, after which they shall be governed by the provisions of this act.

'(2) Whenever any such railroad company shall undertake the construction of a branch designated as provided in the first section of this act, they shall receive donations or subscriptions to stock to aid its construction in the name of such branch, which shall be expressed in the certificate of stock issued. The cost and expenses of constructing and operating such branch shall be kept separate and distinct from expenses on the main line. They may borrow money and issue bonds secured by mortgage on such branch road to aid in its construction, and, in general, may operate, lease, sell, or consolidate with any connecting road, distinct and separate from their main line, and in any other way may manage or dispose of such branch as by law they may be authorized with reference to their main line, and separate therefrom.

'(3) Any branch road so constructed shall not be holden for any debt, lien, or liability of the main line, nor shall the main line be holden for any debt, lien, or liability of such branch. Any dividends of profits arising out of the business of such branch road shall be divided among the stockholders in said branch; and in all respects the interest of the stockholders in the branch shall be kept separate and distinct from the interests of the stockholders in the main line.

'(4) The holders of stock in an railroad company which was subscribed in aid of the construction of a branch road according to the provisions of this act shall have the same rights as other stockholders in the company in the choice of officers; but in all matters directly and specially affecting the interests of such branch road the stockholders in such branch shall control, and for such purpose the directors, under their by-laws, may, or on the petition of parties representing one-tenth of such stock shall, call a meeting of the stockholders in such branch, setting forth the object of such meeting; and at any such meeting such stockholders may instruct the board of directors in all matters relating especially to their interests, and they shall be governed by such instructions, if not inconsistent with the laws of the state and the powers of such company.' Laws Mo. 1868, p. 90.

The branch road in question was constructed under the provisions of that statute. That fact distinctly appears from the preamble and resolutions adopted by the board of directors of the St. Joseph & Iowa Railroad Company, March 25, 1871, (a certified copy thereof being filed April 19, 1871, in the office of the secretary of state of Missouri,) and...