State ex rel. Wine v. Keokuk & Western Railroad Co.
| Decision Date | 04 November 1889 |
| Citation | 12 S.W. 290,99 Mo. 30 |
| Parties | The State ex rel. Wine, Collector, v. Keokuk & Western Railroad Company, Appellant |
| Court | Missouri Supreme Court |
Appeal from Scotland Circuit Court. -- Hon. B. E. Turner, Judge.
Affirmed.
F. T Hughes for appellant.
(1) The ninth section of the charter of the Alexandria and Bloomfield Railroad Company, exempting the property of that company from taxation for twenty years after completion, constituted a contract between that corporation and the state within the meaning of that clause of the constitution of the United States which declares that no state "shall pass any law impairing the obligation of contracts." Trustees of Dartmouth College v. Woodward, 4 Wheat. 518; Sloan v. Railroad, 61 Mo. 30; Scotland County v Railroad, 65 Mo. 123; State v. Garroutte, 67 Mo. 465; State ex rel. v. Greer, 78 Mo. 191. (2) This exemption was one of the rights and privileges of the Alexandria and Bloomfield Company, and was transferred to the Missouri, Iowa and Nebraska Railway Company by virtue of the consolidation, so that thereafter this company held the right and privilege to the same extent as it had been before held by the said Alexandria and Bloomfield Company. Rorer on Railroads, 593, 1501; State v. Greene County, 54 Mo 540; Scotland County v. Railroad, 65 Mo. 123; State v. Garroutte, 67 Mo. 465; Wagner v. Meety, 69 Mo. 150; State ex rel. v. Greer, 78 Mo. 188; Railroad v. Maryland, 10 How. 376; Tomblinson v. Branch, 15 Wall. 460; Railroad Tax Case, 18 Wall. 460; Railroad v. Georgia, 92 U.S. 665; Branch v. City of Charleston, 92 U.S. 667; Scotland County v. Thomas, 94 U.S. 682; Schuyler County v. Thomas, 98 U.S. 169; Greene County v. Conness, 109 U.S. 140; Livingston County v. Bank, 128 U.S. 102. (3) The consolidation of these companies "was in perfect accord with the general purpose of the original charter of the Alexandria and Bloomfield Company." Livingston County v. Bank, supra. (4) This right and privilege was not simply to transfer to the consolidated company the physical property or constructed road of the Alexandria and Bloomfield Company, but the rights and privileges and franchises as well, to construct the line of road authorized to be constructed by this company within the time prescribed in the charter of the Alexandria and Bloomfield Company, and if completed within the time to have the completed line exempt from taxation for the same period as if it had been completed by the Alexandria and Bloomfield Company. The privilege to complete the road within the twenty years prescribed was as much a part of the contract as the right of exemption after completion, in fact "is property of the most valuable kind." Cases cited, supra. (5) A consolidation of a road in this state with another of an adjoining state, so as to form a continuous line, simply preserves the chartered rights in the respective states as they were before the consolidation. The duties and the obligations to the state, the rights and privileges of the companies, remain the same. Neither state law has any extra territorial force. Wood's Railway Law, p. 32 and note; Railroad v. Wheeler, 1 Black [U. S.] 286; Muller v. Dows, 94 U.S. 444. (6) A consolidation of a road in Missouri with one in Iowa, forming a continuous line under laws of Missouri, is not a sale or transfer of the Missouri road to a corporation of another state. It remains a separate corporation in each state and subject to the respective laws. Greene County v. Conness, 109 U.S. 104; State ex rel. v. Railroad, 89 Mo. 523; Wood's Railway Law, p. 32, and cases cited. (7) This court and the circuit court of the United States, years ago, construed the laws of this state in reference to this charter and consolidation, and held the property of the Missouri, Iowa and Nebraska Company exempt from taxation. On the faith of these decisions, rights have been acquired which cannot now be divested without a violation of the section of the constitution of the United States before referred to. It is stare decisis and res adjudicata. Thomas v. Scotland County, supra; Scotland County v. Railroad, supra; Freeman on Judgments, sec. 326; Gelpecke v. Dubuque, 1 Wall. 206. (8) There was no power reserved in the general laws of Missouri applicable to the Alexandria and Bloomfield charter by which the legislature of that state could, by any act, repeal the exempting clause contained in it. Scotland County v. Railroad, and State ex rel. v. Greer, supra.
John M. Wood, Attorney General, and John C. Moore, Prosecuting Attorney, for respondent.
(1) The state of Missouri was not a party to the case of Scotland County v. Railroad, 65 Mo. 123, and nothing therein contained can be construed to take from her the sovereign right to tax appellant's property. (2) By agreement made May 3, 1870, by and between the Alexandria and Nebraska City, The Iowa Southern, and the Missouri, Iowa and Nebraska Companies, on one part, with the state of Missouri on the other, the right to exemption was surrendered to the state, the charter was annulled, and the new company (M., I. & N.) became organized under the general laws of the state, and not under a charter. Wagner v. Meety, 69 Mo. 150; Railroad v. Georgia, 63 Ga. 483; State ex rel. v. Garroutte, 67 Mo. 445; Railroad v. Maine, 96 U.S. 499; Trask v. Maguire, 18 Wall. 391; Clearwater v. Meredith, 1 Wall. 25; Railroad v. Georgia, 98 U.S. 359. (3) This happened after July 4, 1865, the date of the adoption of the constitution of 1865. This constitution forbade the exemption claimed, and, therefore, the judgment of the circuit court should be affirmed.
OPINION
-- This is a suit in the name of the state to the use of Wine, collector of Scotland county, to enforce the payment of state, county, school and municipal corporation taxes, levied on the property of the Missouri, Iowa and Nebraska Railway Company for the tax year ending in August, 1886. The defendant corporation became the purchaser of the railroad property after the taxes were levied, and the defense is that the property was exempt from taxation whilst owned by the Missouri, Iowa and Nebraska Railway Company. The circuit court ruled against the defendant, and hence this appeal.
The legislature, by the act of February 9, 1857 (Acts of 1856, p. 94), incorporated the Alexandria and Bloomfield Railroad Company with power to build a railroad from Alexandria, in Clark county, in the direction of Bloomfield, in the state of Iowa, to a point on the line between this and that state. The act provides that the construction of the road shall be commenced within ten years after its passage, and completed within ten years thereafter, and that "the stock of said company shall be exempt from taxation for a period of twenty years after its completion." It is alleged in the answer, and not denied, that the company was duly organized in 1864, and then commenced and proceeded to carry out its proper business and railroad operations under the act.
The name of the company was changed to that of the Alexandria and Nebraska City Railroad by authority of the act of February 19, 1866. (Acts of 1865, 1866, p. 222.) There are several sections in this act, and the fourth section provides that the whole, or any section thereof, shall be adopted by the board of directors, and shall be in full force from and after the adoption. It is alleged, and not denied, that the company adopted the first section, which authorized the change of name, but it does not appear that any of the other sections were adopted.
The Alexandria and Nebraska City Railroad Company and the Iowa Southern Railway Company, a corporation organized under the state of Iowa, were consolidated on the third of May, 1870, under the name of the Missouri, Iowa and Nebraska Railroad Company, thus forming one continuous line from Alexandria, on the Mississippi, in this state, to a point in the state of Iowa, near Nebraska City, on the Missouri river. It was admitted upon the trial that the railroad was constructed and put in operation through Scotland county in 1871, and completed to the state line in December, 1872. It does not appear how much work had been done in this state before the consolidation.
In 1886, and after the taxes in question had been levied, the entire consolidated road was sold under a decree of foreclosure, entered in the circuit court of the United States for the southern district of Iowa, to certain individuals, who conveyed it to the defendant corporation, the Keokuk and Western Railroad Company.
The period of twenty years' exemption had not expired when the taxes in question were levied by the county court of Scotland county. The general question, therefore, is, whether the property was exempt from taxation while owned by the consolidated company.
It was held in the case of Scotland County v This consolidated company (65 Mo. 123), brought to recover taxes for the year 1872, that the exemption of the stock of a corporation is an exemption of the property represented by the stock. The court then proceeds to say: It was then held that the designated section of the constitution did not, and could not, destroy rights existing when it was adopted, and that the legislature did not repeal the exemption by the tax law of March, 1871. As to the questions actually considered in that case, it is sufficient to say, we are satisfied with what was then said and ruled. The question whether the consolidated company succeeded to the right...
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