State v. Philadelphia, W. & B.R. Co.

• Decision Date: 23 June 1876
• Parties: THE STATE OF MARYLAND v. THE PHILADELPHIA, WILMINGTON AND BALTIMORE RAILROAD COMPANY. THE STATE OF MARYLAND v. THE PHILADELPHIA, WILMINGTON AND BALTIMORE RAILROAD COMPANY.
• Court: Maryland Court of Appeals

45 Md. 361

THE STATE OF MARYLAND v. THE PHILADELPHIA, WILMINGTON AND BALTIMORE RAILROAD COMPANY.

THE STATE OF MARYLAND v. THE PHILADELPHIA, WILMINGTON AND BALTIMORE RAILROAD COMPANY.

Court of Appeals of Maryland

June 23, 1876

Acts 1872, c.

234 imposing a tax of one-half of 1 per cent. on the gross receipts of all steam railroad corporations in lieu of all other taxes, is not a direct tax, but a tax upon the franchises of such corporations, and therefore does not violate the constitutional requirement that every person ought to contribute his proportion of public taxes according to his actual worth in real or personal property.

Appeals from the Superior Court of Baltimore City.

These two suits were brought by the appellant to recover from the appellee a tax of one-half of one per cent. on its gross receipts, in the one case, from the 1st of April, 1872, to the 31st of December, 1872, and in the other case from the 31st of December, 1872, to the 31st of December, 1873. In the case brought on the 6th of September, 1873, the declaration claimed one-half of one per cent. on the same proportion of the whole gross receipts of the road, as the length of the company's track in Maryland, bore to the whole length of the road, which ran through the States of Maryland, Delaware and Pennsylvania. In the case brought on the 12th of July 1875, the declaration in its terms claimed percentage upon the total gross receipts. The claim in both cases rested on the Act of 1872, ch. 234. This Act was repealed, and re-enacted with amendments by the Act of 1874, ch. 408, all existing rights being reserved. At the trial of the causes the plaintiff and defendant entered into an agreed statement of facts, from which it appears, that the appellee was formed by an agreement of union dated the 5th of February, 1838 duly made and entered into between the following corporations to wit: The Baltimore and Port Deposit Railroad Company, the Wilmington and Susquehanna Railroad Company, and the Philadelphia, Wilmington and Baltimore Railroad Company, (of Pennsylvania.) That the Baltimore and Port Deposit Railroad Company was incorporated by the Act of 1831, ch. 288, of the General Assembly of Maryland. The Wilmington and Susquehanna Railroad Company was formed by an agreement of union, duly made and entered into on the 18th April, 1836, between the Delaware and Maryland Railroad Company, and the Wilmington and Susquehanna Railroad Company, (of Delaware,) in virtue and in strict pursuance of the several Acts, in said agreement of union recited, and was certified and recorded as directed by said several Acts. The said corporation, the Delaware and Maryland Railroad Company was incorporated by the Act of 1831, ch. 296, of the General Assembly of Maryland. The Wilmington and Susquehanna Railroad Company (of Delaware,) was incorporated by an Act of the General Assembly of Delaware, passed on the 18th of January, 1832. The Philadelphia, Wilmington and Baltimore Railroad Company, (of Pennsylvania,) was originally chartered by an Act of the General Assembly of the Commonwealth of Pennsylvania, approved on the 2nd of April, 1831, by the name of the Philadelphia and Delaware County Railroad Company, which, by a supplement to said Act, passed the 14th of March, 1836, was changed to the corporate name of "The Philadelphia, Wilmington and Baltimore Railroad Company." That portion of said railroad which lies west of the Susquehanna river, that is to say, between the City of Baltimore and the Susquehanna river, lying partly in Baltimore County, and partly in Harford County, and being thirty-six miles in length, was made and constructed (prior to the agreement of union of the 5th of February, 1838,) and was owned in severalty by the Baltimore and Port Deposit Railroad Company.

That portion of said railroad which lies east of the Susquehanna, and between the river and the divisional line between the State of Delaware and the Commonwealth of Pennsylvania, was made by the Wilmington and Susquehanna Railroad Company, and (prior to the said agreement of union of the 5th of February, 1838,) was owned in severalty by said last mentioned company, and of this, eighteen and a half miles are within the State of Maryland, being between the Susquehanna river and the divisional line between the States of Maryland and Delaware.

The defendant has, to the time of the passage of the Act of 1872, ch. 234, paid taxes on its real property and permanent, and fixed works in Baltimore City, and Baltimore, Harford and Cecil Counties. The tax sought to be imposed by the Act of 1872, ch. 234, that is on the gross receipts of the defendant, is much larger than the tax on property of said company, upon the basis of section 19 of the Act of 1831, ch. 296, as applied to all that part of said railroad within the limits of the State of Maryland, on which basis the said Railroad Company had been paying State taxes before and at the time of the passing of said Act of 1872, ch. 234. And the said tax of one-half of one per cent. of the gross receipts of the defendant, greatly exceeds in rate the Maryland State tax at the time of passing the said Act

of 1872, ch. 234, and since levied by the general tax laws of Maryland on the property, real and personal, of the citizens of said State, even if said tax of one-half of one per cent. is limited to the same proportion of said gross receipts, as the part of said road within the State of Maryland bears to the whole road. Under the last assessment made on the basis of the said section 19 of the Act of 1831, ch. 296, the whole amount of the property of the said Philadelphia, Wilmington and Baltimore R. R. Company in the State of Maryland, liable to taxation, was fixed at $999,939, on which the said Company has paid State, County and City taxes up to the year 1871 inclusive, and of said total assessment $371,120 was in Cecil County, being that part of the said road which originally constituted the Delaware and Maryland Railroad.

It was also agreed that the Court should enter judgment in both of the suits pro forma, for defendant; and judgment was so entered.

The cases were submitted to the Court without the intervention of the jury.

Exception.--The plaintiff prayed the Court to rule and decide as the law of the cases, as follows:

1. That on the pleadings and admitted facts in this cause, the defendant is not entitled to any exemption from the State tax in this suit claimed, by reason of anything in its charter contained.

2. That on the pleadings and admitted facts in this cause, the defendant is not entitled to any exemption from the State tax in this suit claimed, by reason of anything contained in any of the charters of the original companies, which by consolidation became the Wilmington and Susquehanna Railroad Company, or the Philadelphia, Wilmington and Baltimore Railroad Company.

3. That upon the pleadings and admitted facts in this cause, the defendant can only at most be entitled to a deduction from the gross amount of the taxes imposed by the Act of 1872, chapter 234, in proportion that the number of miles of the Delaware and Maryland Railroad Company bears to the whole number of miles for which the taxes in this suit are claimed.

4. That upon the pleadings and admitted facts in this cause, the plaintiff is entitled to recover in this suit, upon a sum equivalent to that part of the gross receipts, which may be in the same proportion to the whole amount of gross receipts of the defendant on its entire road from Baltimore to Philadelphia, that the number of miles of the Baltimore and Port Deposit Railroad Company bears to the whole number of miles of the Philadelphia, Wilmington and Baltimore Railroad Company, of which it forms a part.

5. That the Act of Assembly of Maryland of 1872, ch. 234, does not impair the obligation of any contract between the State of Maryland and the defendant, within the meaning of the 10th section, Article 1, Constitution of the United States, and that for anything in the Constitution of the United States contained, the plaintiff is, under the admitted facts of this cause, entitled to recover the amount of taxes claimed in this suit.

6. That for anything in the Bill of Rights or Constitution of the State of Maryland contained, on the admitted facts in this suit, the plaintiff is entitled to recover the taxes claimed in this suit.

7. That the exemption of the shares of the capital stock of the Delaware and Maryland Railroad Company in its charter contained, did not exempt the property of said corporation from taxation, and that on the evidence the plaintiff is entitled to recover in this suit.

8. That the exemption in the charter of the Delaware and Maryland Railroad Company did not exempt the franchise of that corporation from taxation by the State, and that on the evidence the plaintiff is entitled to recover in this suit.

9. That the exemption of the shares of the capital stock of the Delaware and Maryland Railroad Company, from the imposition of any tax or burthen, except on that portion of the permanent and fixed works of said company, which may be within the State of Maryland, and requiring that any tax which should thereafter be levied upon said section, should not exceed the rate of any general tax, which might at the same time be imposed upon similar real or personal property of this State, for State purposes, is in violation of the 15th Article of the Bill of Rights of Maryland, in force at the date of the passage of the Act of Assembly, granting the charter of said company, and void, and that notwithstanding said clause in said charter, the plaintiff is entitled to recover on the evidence in this suit.

10. That the defendant is not by its charter entitled to any exemption from taxation for State...