Scotland Cnty. v. Missouri, Iowa & Nebraska Ry. Co.

• Decision Date: 30 April 1877
• Citation: 65 Mo. 123
• Parties: SCOTLAND COUNTY, APPELLANT v. THE MISSOURI, IOWA & NEBRASKA RAILWAY COMPANY.
• Court: Missouri Supreme Court

65 Mo. 123

SCOTLAND COUNTY, APPELLANT

v.THE MISSOURI, IOWA & NEBRASKA RAILWAY COMPANY.

Supreme Court of Missouri.

April Term, 1877.

Appeal from Scotland Circuit Court.--HON. E. V. WILSON, Judge.

W. T. Kays for appellant.

By the 7th section of Chapter 34 Art. 1 R. S. 1855, the legislature reserved the power to alter, suspend or repeal the defendant's charter. Pacific R. R. v. Renshaw, 18 Mo. 210; matter of Lee & Co.'s Bank 21 N. Y., Rep. 9; Commonwealth v. Fayette Co. R. R. Co.,55 Penn. St. 452; State v. Person, 3 Vroom. 566; 6 ib. 157; Angell & Ames on Corp. sec. 767. Sections 56 and 57 of the Railroad act were intended only to give the right to repeal the act of which they formed part, and to determine the effect of such repeal or alteration. The right to alter, etc., any special charter, is neither granted nor withheld by those sections. Hence this law is not repugnant to the general law embraced in chap. 34 art. 1, nor does it fully embrace the whole subject matter of that law. In so far as there is any conflict between sec. 7 chap. 34 art. 1, and sections 56 and 57 of the Railroad law of 1855, it amounts to this, that the latter law limits the former in its application to corporations formed under the latter law, and the former furnishes the rule governing alterations, etc., in all other cases. Gordon's Ex. v. Mayor, 5 Gill 231; Beale v. Hale, 4 Howard 37; Broom's Legal Maxims p. 21, side page 28, 5th ed; Matter of the Reciprocity Bank, 22 N. Y., 9.

A. J. Baker, P. E. Bland and Frank Hughes for respondent.

1. The exemption of the stock from taxation, exempts also the property, which the stock represents, and which is necessary to the transaction of the ordinary business of the corporation. R. R. Co. v. Mayor, 14 Geo. 279; Mayor v. Balt. & O. R. R., 6 Gill 295; New Haven v. City Bk., 31 Conn. 106; State v. Tunis, 3 Zab. 547; State v. Bentley, ib. 532; Hann. & St. Jo. R. R. v. Shacklett, 30 Mo. 550; Augusta v. R. R. & Bk. Co., 26 Geo. 651.

2. The defendant by virtue of the consolidation, succeeds to the exemption from taxation contained in section 9 of the Alexandria & Bloomfield Railroad charter. State ex rel. v. Green Co., 54 Mo. 551; Phil. & Wil. R. R. v. Maryland, 10 How. 376; Tomlinson v. Branch, 15 Wal. 460.

3. Neither the Constitution, art. 11 sec. 16, nor the act of March 10, 1871, providing a uniform system for assessing and collecting taxes from railroad corporations, repeals section 9 of the charter of the Alexandria & Bloomfield Railroad Company. Cooley on Const. Lim. 62, 63; Sedg. on Stat. and Const. Const. 167, 173, 161, note A; Seamans v. Carter, 15 Wis. 548; State v. Atwood, 11 ib. 423; Finney v. Ackerman, 21 ib. 268; Garfield v. Bemis, 2 Allen 446; N. B. Bank v. Copeland, 7 ib. 140; Tilman v. Lansing, 4 John. 45; Bartruff v. Remey, 15 Iowa 257; Abingdon v. Duxbury, 105 Mass. 287; Armstrong, v. Hinds 48 N. Y. 505; Ely v. Holton, 15 ib. 376; Bailey v. Major, 7 Hill 146; Dash v. Van Kleek, 7 Johns 477; Sayre v. Wisner, 8 Wend. 661; State v. Auditor, 41 Mo. 25; State v. Macon Co. Ct., ib. 453; McManning v. Farrer, 46 ib. 376. Where an exemption by special enactment of specific property from taxation, has once been established, such exemption will not be held to be repealed by implication. The intention to repeal, must be as clearly expressed, as was the intention to exempt. State v. Minton, 3 Zab. 529; State v. Bently, ib. 532; State v. Jersey City, 2 Vroom. 575; Williams v. Pritchard, 4 D. & E. 2; Fosdick v. Perrysburg, 14 Ohio St. 485: Brown v. Co. Comm.,21 Penn. St. 43; Gregory's Case, 6 Coke's Rep. 19; Blain v. Baily, 25 Ind. 165; Clark v. Davenport, 14 Iowa 494; Burke v. Jeffreys,20 ib. 145; Felt v. Felt, 19 Wis. 193; Mead v. Bagnall, 15 ib. 156; St. Louis v. Alexander, 23 Mo. 483; St. Louis v. Indp't Ins. Co., 47 ib. 146; Deters v. Renick, 37 ib. 597; Vastine v. Probate Court, 38 ib. 529; State v. Miller, 1 Vroom 369.

The Legislature, by the act of February 27, 1875, expressly withdrew this exemption. This shows that the understanding of that branch of the government is that direct legislation was necessary. See Smith v. Clark County, 54 Mo. 58.

4. If the act of March 10, 1871, was intended to apply to the defendant's charter, so as to repeal the exemption from taxation as contained in section 9, of said charter, then it is in conflict with the constitution of the United States, in this, it impairs the obligation of defendant's contract with the State of Missouri, as contained in said 9th section of the charter.

( a) An exemption from taxation--when not prohibited by the Constitution--may be made by a State Legislature.

( b) When such exemption is contained in a charter granted by a State Legislature to a corporation, it becomes, after the incorporators have accepted such charter, and organized under it, a contract with the State and is protected by the Constitution of the United States from alteration and repeal; UNLESS there is, in the charter itself, or in the general law in force at the time of its adoption and acceptance, and which general law is, by its terms, made applicable to corporations formed under such charters, a reserved right to make such alteration or repeal, and in the absence of any such reserved power on part of the legislature, any alteration or repeal which has for its object the repeal of such exemption, is void for repugnancy to the Constitution of the United States. Dartmouth College v. Woodward, Wheat 518; State Bank v. Knoop, 16 How. 369; Ohio Life Ins. and T. Co. v. Debolt, ib. 416; New Jersey v. Wilson, 7 Cranch. 164; Providence Bank v. Billings, 4 Pet. 561; Charles River Bridge v. Warren Bridge, 11 Pet. 420; Gordon v. Appeal Tax Court, 3 How. 133; State v. Mansfield, 3 Zab. 510; Gardner v. State, 1 ib. 557; Johnson v. Commonwealth, 7 Dana 342; Neustadt v. Ill. Cent. R. R. 31 Ills. 484; Bank v. New Albany, 11 Ind. 139; Home of the Friendless v. Rouse, 8 Wal. 430; Washington University v. Rouse, ib. 439.

It remains only to inquire whether the Legislature has reserved such a right to itself. And this depends on the construction to be put on sec. 7 (R. S. 1855, p. 371) and secs. 56 and 57 (ib. 438).

The plaintiff claims that the liability of the defendant's charter to “““ alteration, suspension or repeal,” is measured by the provisions of said section 7, and that by reason of such reserved authority the Legislature on the 10th day of March, 1871, had the power to repeal the exemption from taxation contained in plaintiff's charter, notwithstanding the fact the corporation had been organized previous to such repeal.

The defendant upon the contrary claims that the act of 1853, re-enacted and amended in 1855, covers the whole field as to railroad corporations, and is the law as to them in all matters wherein there is any conflict between said act, and the act of 1845, and that the 56th section of the law of 1855, applies as well to railroads formed under special charters, as to those organized under the provisions of that act.

The design indicated in sec. 57 supra, clearly was to place all railroads, so far as the same could be done without violation of the contract contained in their charter, on an equal footing, and that the act, so far as it could legally be made to do so, should apply alike to companies organized under special charters and those organized under that act.

If it is a PRIVILEGE to have exemption from taxation, and to have that immunity protected from legislative interference, then this section 57 has the effect of engrafting into the charter of every railroad company the provisions of section 56, and to protect the companies organized under special charters, from amendment, after organization in such a manner as to effect any of their RIGHTS. That this is a privilege, see Smith v. Clark County, 54 Mo. 58; State ex rel. v. Green County Court, ib. 540.

The object of the State in granting this privilege must be kept in mind, viz: “to induce capital to invest in railroads which were to be constructed here, not so much with a view to furnish facilities to existing wealth and population and commerce, as to ereate them in a wilderness,” as said by Napton J. in Lackland v. N. Mo. R. R. Co. To this end it was necessary to guarantee protection to capital. Section 7 supra seemed a standing menace, authorizing, as it did, a repeal of any charter. See Renshaw v. Pacific R. R. It was to remove this danger that section 56 was passed, guaranteeing vested rights in railroad corporations.

It is true that the “act concerning corporations” at one time, covered the whole field of corporations. That was, however, before the Legislature had passed any laws classifying the different kinds of corporations, making provision for the government of each particular class. When, however, this was done, it was an expression of the legislative will that, so far as this class of corporations was concerned, it should be taken from under the operation of this general law of corporations, and be governed by provisions specially applicable to its class. This railroad corporation law is, as to the “act concerning corporations,” a special or particular statute in this, that it selects from the numerous kinds of corporations covered by this latter act, a particular class, and provides for their formation and government.

It is a general law, in so far as it applies to all corporations formed, or to be formed, for the purpose of constructing and operating railroads. It is as to that class of corporations, a revision of, or substitute for, the law of corporations and not an amendment, and being a subsequent statute on that subject, it repeals the first to the extent to which its provisions are revised or substituted. Tyler v. City of St. Louis, 56 Mo. 64; United States v. Tynen, 11 Wal. 88; Henderson's Tobacco, ib. 652; Murdoc v. Memphis, 20 Wall. 590; 2 C. L. J. 135; Pierpont v. Crouch, 10 Cal. 315; Bartlett v. King, 12 Mass. 555; Nichols v. Squire, 5 Pick. 168; Rogers v. Watrous, 8 Tex....