Tucker v. Ferguson Et Al

• Decision Date: 01 October 1874
• Citation: 22 Wall. 527,89 U.S. 527,22 L.Ed. 805
• Parties: TUCKER v. FERGUSON ET AL
• Court: U.S. Supreme Court

89 U.S. 527

22 L.Ed. 805

22 Wall. 527

TUCKER v. FERGUSON ET AL.

October Term, 1874

APPEAL from the Circuit Court for the Western District of Michigan.

The Flint and P ere Marquette Railway Company was a railway corporation of Michigan, and the present suit was a bill in equity brought by Tucker et al., trustees for the holders of bonds issued by the said company, which bonds were secured by a mortgage and deed of trust executed by the company to them, the said Tucker et al., as trustees, upon lands granted by Congress to the State of Michigan, and by that State granted, in a qualified way, to the company to aid in constructing a road which it was about to make; the object of the bill having been to restrain one Ferguson et al., who were supervisors and assessing officers of Osceola County, Michigan, from levying and collecting local taxes upon the said lands situate in the said county.

The general purpose of the bill was to restrain the assessment of taxes at any time on the lands granted by Congress, during the term allowed for the completion of the road. But if the court should think there was no ground for so general a restraint, then to restrain the collection of taxes which had been already assessed on the lands for the year 1873; the bill alleging that in no event were they taxable prior to April 1st, 1874.

The case, more particularly stated, was thus:

On the 3d of June, 1856,¹ Congress granted to the State of Michigan, to aid in the construction of certain proposed railroads, including one from Flint, in the southeasterly part of the State, to P ere Marquette, on Lake Michigan, in the northwestern part—a distance of about one hundred and seventy miles, much of the western part of which especially was a wilderness—every alternate section of land designated by odd numbers, for six sections in width on each side of said roads, 'which lands,' said the act of Congress granting them, 'shall be held by the State of Michigan for the use and purpose aforesaid.' By the terms of the first section of the act the lands were to be located in no case further than fifteen miles from the lines of the road, and it was enacted that they should be 'exclusively applied' in the construction of the road; 'disposed of only as the work progressed, and applied to no other purpose whatsoever.'

Section third enacted that the lands thus granted to the State, should 'be subject to the disposal of the legislature thereof for the purpose aforesaid, and no other, and that the railroads shall be and remain public highways for the use of the government of the United States, free from toll or other charges upon the transportation of any property or troops of the United States.'

Section fourth was in these words:

'That the lands hereby granted to said State shall be disposed of by said State only in manner following; that is to say, that a quantity of land not exceeding one hundred and twenty section for each of said roads, and included within a continuous length of twenty miles of each of said roads, may be sold; and when the governor of said State shall certify to the Secretary of the Interior that any twenty continuous miles of any of said roads is completed, then another quantity of land hereby granted, not to exceed one hundred and twenty sections for each of said roads having twenty continuous miles completed as aforesaid, and included within a continuous length of twenty miles of each of such roads, may be sold, and so, from time to time, until said roads are completed; and if any of said roads is not completed within ten years,2

no further sales shall be made, and the lands unsold shall revert to the United States

Section fifth enacted that the United States mail should be transported over the road, under the direction of the Post-Office Department, at such price as Congress might by law direct.

On the 12th of February, 1857, and, of course, after the passage of the act of Congress, the Flint and P ere Marquette Company was organized under the general railroad law of Michigan. And two days after this, again, that is to say, on the 14th of February, 1857, the State of Michigan by an act enacted,

'That the lands, franchises, rights, powers, and privileges granted to, and conferred upon, the State of Michigan by an act of Congress, approved June 3d, 1856, be, and the same are hereby, accepted, with the restrictions and upon the terms and conditions contained in said act of Congress.'

The act proceeded in substance thus:

'SECTION 2. So much of the aforesaid lands, &c., as are or may be granted and conferred in pursuance of said act of Congress, to aid in the construction of a railroad, . . . from Flint to p ere Marquette, are hereby vested fully and completely in the Flint and P ere Marquette Railway Company, according to the provisions of the act of Congress relating thereto, and the direction of the board of control hereby appointed. The said railroad company shall be subject to all the conditions, restrictions, and obligations imposed upon them by this act, as hereinafter provided.

'SECTION 3. The lands, &c., hereby conferred upon and vested in the railroad company, shall be exclusively applied in the construction of its line of road, and to no other purposes whatsoever.'

Section seventh enacted that after the completion of twenty continuous miles of road, the company might sell sixty sections of land in any twenty continuous miles of line of road, &c. 'and after the full and final completion of the entire length of its road, and the acceptance of the same by the board of control herein provided, then the company may sell the remainder of the lands, &c., and not before.' The act further enacted,

'None of the lands hereby granted shall be liable to taxation for seven years from 1st September next [i. e., shall not be liable till September, 1863], except such parts as shall be sold or be improved.'

The act went on:

'SECTION 8. . . . For the purpose of properly managing and disposing of the lands . . . the governor of the State of Michigan, together with six commissioners to be nominated by the governor and confirmed by the senate, are hereby constituted a board of control of the same, whose duty it shall be to manage and dispose of such lands in aid,' &c.

'SECTION 12. The said railroad company shall at all times and in all matters be subject to the laws of this State, and to such rules and regulations as may from time to time be enacted and provided by the legislature of the State of Michigan, in regard to the management and disposition of the said lands, not inconsistent with the provisions of this act and the act of Congress making the said grant of lands to this State, and they shall be entitled to all the immunities and privileges conferred by said laws.'

'Provided, That nothing herein contained shall be so construed as to relinquish the right of the State to any specific tax imposed upon any railroad company within this State.'

The company was bound by the nineteenth section to complete and put in running order at least twenty continuous miles during each year after 1st December, 1857, and to complete the road within seven years from 15th November next, 1857, i. e., by the 16th of November, 1864; a term, however, by both State legislation and act of Congress subsequently enlarged till March 3d, 1876.

At the time when the Flint and P ere Marquette Railway Company was organized, all railroad companies in Michigan were liable, under a general railroad act (section forty-five), to a specific tax of one per cent. on their 'paid in capital stock.' Of course, in the case of a company like the P ere Marquette, and the other companies provided for in the act of Congress,—built, all of them, chiefly by the land grant,—the tax was a light one.

The twentieth section of the present act, which raised one of the important questions in the case, now made for the Flint and P ere Marquette Company, as well as for the others, a heavier tax. The section was as follows:

'SECTION 20. In consideration of the grants of land and other privileges hereby conferred . . . the said several railroad companies are hereby required, within sixty days from and after the first day of each and every year, to pay into the treasury of this State, as a specific annual tax, one per cent. upon the cost of the road and its equipments and appurtenances of whatever kind; and it shall be lawful for the legislature of this State, in their discretion, after ten years, to impose upon either or each of said railroad companies the payment of a further tax upon the gross or total earnings of such road of not exceeding two per cent.; which said above several taxes shall be in lieu of all other taxes to be imposed within this State.'

The Flint and P ere Marquette Company accepted the grant made by this act.

It may be here stated, that it was afterwards enacted by Congress that the State of Michigan might authorize the sale of sixty sections, whenever the governor might certify that ten additional miles was completed. The original act, it will be remembered, had prescribed a sale of one hundred and twenty sections, on a certificate of twenty miles completed, &c. This last matter is, perhaps, unimportant.

As the reader will doubtless have observed, in reading what goes before, Congress granted the lands which it did grant to the State, to be disposed of 'only' in a certain manner in the act of grant stated. They were to be 'sold'³ from time to time, as certain lengths of the road were completed; and no other manner of disposing of them is stated in the act as contemplated. And the State of Michigan in accepting the lands, accepted them 'with the restrictions and upon the terms and conditions contained in said act of Congress.'⁴ It was soon found, however, as the road progressed westward, that it was coming to regions which were uninhabited, and that the land there being in a wilderness could not be sold for twenty miles ahead of even a completed...