People of State of New York Troy Union Co v. Mealy

• Decision Date: 08 November 1920
• Docket Number: No. 63,63
• Citation: 254 U.S. 47,65 L.Ed. 123,41 S.Ct. 17
• Parties: PEOPLE OF STATE OF NEW YORK ex rel. TROY UNION R. CO. v. MEALY et al
• Court: U.S. Supreme Court

254 U.S. 47

41 S.Ct. 17

65 L.Ed. 123

PEOPLE OF STATE OF NEW YORK ex rel. TROY UNION R. CO.

v MEALY et al.

No. 63.

Submitted Oct. 21, 1920.

Decided Nov. 8, 1920.

Messrs. William L. Visscher and Lewis E. Carr, both of Albany, N. Y., for plaintiff in error.

Mr. George B. Wellington, of Troy, N. Y., for defendants in error.

Mr. Justice HOLMES delivered the opinion of the Court.

This was a proceeding in the Supreme Court of New York seeking by certiorari to review and set aside an assessment of city taxes upon the relator's property at a valuation of one million dollars; the relator contending that it had a contract by virtue of which the City to Troy and the State were limited to a valuation of $30,000 for the purposes of the tax. A referee, a single judge, the Appellate Division of the Supreme Court and the Court of Appeals successively have decided against the relator's claim, but it brings the case here on the ground that an attempt to repeal the statute upon which it bases its immunity impairs the obligation of contracts and is void. 88 Misc. Rep. 649, 152 N. Y. Supp. 435; 179 App. Div. 951, 165 N. Y. Supp. 1109; 224 N. Y. 187, 120 N. E. 155.

The case is this. In 1851 it was desired to establish a common terminal station and common tracks passing through a portion of the City for four railroads then having termini in Troy. An act of that year, c. 255, authorized the City and the four roads to subscribe for the stock of a new corporation to be formed for that purpose, and the City to issue bonds when secured by a mortgage of the new road to be built and by contract of the four subscribing roads. In July, 1851, the contemplated corporation was formed with a stock of $30,000; it is the relator in this suit. Then on December 3, 1852, an agreement was made by the City of Troy, the Troy Union Railroad Company, and the four other railroads, providing for carrying out the plan, and therein the City covenanted to join in an application to the Legislature of New York that the new road should be exempt from taxation upon an amount exceeding the present amount of its capital stock, and, if such law should not be passed, to refund the amount of the city taxes for any valuation exceeding said present stock. The above mentioned mortgage was executed, the four roads gave the City their covenant of indemnity and thereafter on June 24, 1853, the desired act of the Legislature was passed. Laws of 1853, c. 462. It provided that——

'for the purposes of taxation in the City of Troy, and in the County of Rensselaer, the property of the Troy Union Railroad Company shall be estimated and assessed (as the common council of said City of Troy, by its contract with said Company, * * * agreed that the same should be) at the amount of the capital stock of said Company, and no more.'

The above mentioned covenant of the City and this provision of the statute are the grounds upon which the relator founds its claim.

After 1853 there was a default in the payment of the interest on the bonds that had been issued by the City under the agreement and the City began an action to foreclose the mortgage given by the road to secure it. Thereupon in 1858 a new contract was made between the parties concerned in which they 'for the purpose of reforming the contract [made in 1852] adopt this instead and in place of the said contract, which is...