State ex rel. Crumpacker v. Chicago, B.&K.C. Ry. Co.

• Decision Date: 30 April 1886
• Court: Missouri Supreme Court
• Parties: STATE ex rel. CRUMPACKER, Collector, v. CHICAGO, B. & K. C. RY. CO.¹ STATE ex rel. GUFFEY, Collector, v. SAME.

89 Mo. 523

STATE ex rel. CRUMPACKER, Collector,

v.CHICAGO, B. & K. C. RY. CO.¹

STATE ex rel. GUFFEY, Collector,

v.SAME.

Supreme Court of Missouri.

April Term, 1886.

Appeal from circuit court, Putnam county; ANDREW ELLISON, Judge.

John P. Butler, B. G. Boone, and S. P. Huston, for plaintiff in error and respondent. L. T. Hatfield and A. W. Mullins, for defendant in error and appellant.

BLACK, J.

These suits were argued at the same time, present the same question, and will be considered together. The plaintiffs are collectors of the revenues, one of Sullivan, and the other of Putnam, county. They seek to recover delinquent taxes for 1881 and 1882. The defendant claims to be the successor of the charter rights of the St. Joseph & Iowa Railroad Company, and, by reason thereof, exempt from the payment of the taxes in suit. The St. Joseph & Iowa Company was created by the act of January 22, 1857. This charter was amended by the acts of November 5, 1857, and March 19, 1868. The third section of the first-named act provides that the company shall be subject to the same restrictions, and entitled to all the rights, privileges, and immunities, which were granted to the Hannibal & St. Joseph Railroad Company, by the acts of February 16, 1847, and two designated amendatory acts. The charter of that company contains a like reference to the act creating the Louisiana & Columbia Railroad Company, approved on January 27, 1837. By these various acts the directors of the St. Joseph & Iowa Company were authorized to construct a railroad from St. Joseph to some point on the Iowa line, so as to connect there with any railroad in this or that state; “to make * * * branches along said road, or at the termination thereof, as they may deem necessary.” And it is also declared: “Every person who shall cease to be a stockholder shall cease to be a member of said company, and the stock of said company shall be exempt from state and county taxes.” On the 25th of March, 1871, the directors passed a resolution asserting their desire to avail themselves of the act entitled, “An act to aid the building of branch railroads in the state of Missouri,” approved March 21, 1868, the branch to be known as the “Central North Missouri Branch,” and to be built from a point on the main line near Unionville, through Putnam, Sullivan, and Linn counties, and the town of Linneus. Sullivan and Putnam counties subscribed to the stock of the road for the use of the branch. At the request of the agents of those counties, they being the only stockholders, an executive committee for the branch was appointed, with power to survey, etc. Thereafter, and on May 23, 1871, the board of directors of the St. Joseph & Iowa Company, by their deed and contract, sold and conveyed the main line and all of the property of the company, including “all the rights, privileges, franchises, powers, and authority owned or held” by said company, to the Burlington & Southwestern Railway Company, a corporation created under the laws of the state of Iowa. Afterwards, and in 1872, the directors of the Burlington Company, acting by the direction of the stockholders of the branch road, then called the “Linneus Branch,” placed upon the branch road a mortgage to secure certain bonds. The main line had been previously mortgaged. The defendant purchased the branch road through a foreclosure sale had upon the mortgage thereon. The taxes in suit were assessed upon this branch road property.

1. The exemption of the stock of the St. Joseph & Iowa Company, it may be conceded, was also an exemption of the property represented by it. As between the state, the company, and the stockholders, it is assumed, for all the purposes of this case, that the property of the company including any branch road built solely under authority of the charter, would be exempt from state and county taxes. The further question then arises, is the property of the branch, avowedly built under the branch act of 1868, also exempt? The power of the legislature to forever place property out of and beyond the reach of taxation, upon no other consideration than that which may be presumed to accrue to the public by the building of a railroad, is so far-reaching in its logical consequences that the exemption should be confined to the clear and strict terms of the law. The abandonment of the right of taxation cannot be presumed, and must appear in clear and unequivocal terms. Railroad Co. v. Cass Co., 53 Mo. 17, and cases cited. The constitution of 1865 deprived the general assembly of all power to hereafter exempt this class of property. Article 11, § 16. The branch railroad act of 1868 makes no such effort. If this property is free from taxation it is because of the charter privileges of the St. Joseph & Iowa Company. The charter has in view main and branch lines, which are parts of one entire piece of property, with one management and one set of stockholders. The branch act, it is true, applies only to such roads as have power to build branches, but, by the act, the stock subscriptions are to be made in aid of the branch, and the certificates must so state. The cost and expenses of construction and operation of that and the main line are to be kept separate. Neither can participate in the profits of the other. Neither can be held for the debts of the other. The branch stockholders have nothing whatever to do with the main line. They determine all matters specially affecting the branch, and the directors must be guided by their instructions. They may participate in the choice of officers only. Here we have a branch road by name, and, while it has no separate corporate existence, yet, for nearly all practical purposes, it is a separate organization. It cannot be that stock and property of that character, and with these attributes, was ever contemplated by the...