99 U.S. 348 (____)


Supreme Court of United States.

Attorney(s) appearing for the Case

Mr. Le Roy F. Youmans, Attorney-General of South Carolina, for the appellants.

Mr. Skipwith Wilmer and Mr. William E. Earle, contra.

MR. JUSTICE FIELD delivered the opinion of the court.

The Richmond and Danville Railroad Company, a corporation created under the laws of Virginia, is the owner of twenty-two thousand shares of the capital stock of the Atlanta and Richmond Air Line Railway Company, a corporation created under the laws of Georgia and South Carolina, and brings the present suit to enjoin the collection of taxes assessed upon its road and other real property in the latter State, alleging that they are exempt from taxation. Its claim to exemption arises in this wise: A company known as the Air Line Railroad Company in South Carolina was incorporated in 1856 by the legislature of that State and authorized to construct a railroad between certain designated points, and to equip, use, and enjoy the same, "with all the rights, privileges, and immunities granted to the Greenville and Columbia Railroad Company under the act incorporating the same and the several acts amendatory thereof," so far as they were applicable. The company was also empowered to unite with any other railroad company and to consolidate their management, and, by an amendment to its charter, to adopt any other corporate name which it should deem best. In pursuance of this authority, it united in 1870 with a company incorporated under the laws of Georgia, known as the Georgia Air Line Railroad Company, and took the name of the Atlanta and Richmond Air Line Railway Company.

The Greenville and Columbia Railroad Company was incorporated in December, 1845, and, by a provision in its charter, the stock of the company and the real estate it might purchase, connected with or subservient to its works, were exempted from taxation for the period of thirty-six years. At the time of its incorporation there was a law of the State in force, enacted in 1841, establishing the principles on which charters of incorporation were thereafter to be granted, the forty-first section of which provides "that it shall become part of the charter of every corporation which shall, at the present or any succeeding session of the General Assembly, receive a grant of a charter, or any renewal, amendment, or modification thereof (unless the act granting such charter, renewal, amendment, or modification shall, in express terms, except it), that every charter of incorporation granted, renewed, or modified as aforesaid shall at all times remain subject to amendment, alteration, or repeal by the legislative authority."

The act incorporating the Greenville and Columbia Railroad Company excepted its charter in express terms from the operation of the act of 1841; but the act incorporating the Air Line Railroad Company in South Carolina made no such exception with respect to its charter. It is contended, however, that by the provision conferring the same rights, privileges, and immunities which the Greenville and Columbia Railroad Company possessed, the Air Line Company not only acquired immunity from taxation for the same period, but that such immunity was placed beyond legislative repeal. The Constitution of the State, adopted in 1868, having required that the property of corporations then existing, or thereafter created, should be subject to taxation, except in certain cases, not applying here, subsequent legislation, passed in conformity with this requirement, imposed a tax upon the property of railroad companies, including that of the Atlanta and Richmond Air Line Railway Company, notwithstanding the exemption mentioned. The present suit was thereupon brought to enjoin its enforcement. The court below held that the property of the company was exempt from taxation for the period of thirty-six years from the date of its charter, and enjoined the officers of the State from collecting the tax assessed. From its decree the present appeal is taken.

By the law of 1841 every charter of a corporation in South Carolina subsequently granted, amended, or modified was subject to repeal, amendment, or modification by the legislature; unless specially excepted from such legislative control in the act granting the charter, amendment, or modification. Such is evidently the meaning of the forty-first section of that law, though the intention is inaptly expressed. This construction is somewhat different from that placed upon it in Tomlinson v. Jessup, reported in 15th Wallace, and gives the legislature a more extended control. But it is the construction to which a more careful examination of the language has led us. By it the legislature said, that subsequent charters should be subject to repeal or amendment, unless they were in express terms excepted from its control in the acts granting them; and that existing charters, if subsequently amended or modified, should stand in the same position. Its provisions constituted the condition upon which every charter was afterwards granted, amended, or modified. They formed as much a part of the new or amended charter as if they had been originally embraced in it. They did not of course operate as a limitation upon the power of succeeding legislatures so as to control any repugnant legislation, but so long as they remained unrepealed, subsequent legislation, not repugnant in its terms, was to be construed and enforced in accordance with them. Railroad Company v. Maine, 96 U.S. 499.

As the act incorporating the Air Line Company in South Carolina in 1856 contained no clause excepting its charter from the provisions of the law of 1841, they must be held applicable to it. To include in that charter an exemption from legislative control because such exemption was possessed by the Greenville and Columbia Company would be to thwart the declared will of the legislature, that such exemption should not exist, unless the act granting the charter excepted it in express terms from that law. Its charter must, therefore, be read as if it declared that its capital stock and the real property purchased by it and connected with or subservient to its works should be exempt from taxation for the period of thirty-six years, unless the legislature should in the mean time withdraw the exemption. Its stock and real property were thus exempted for that period from the general tax levied upon property of that kind, unless the legislature should specifically direct otherwise.

If it be assumed, however, that by the act incorporating the Air Line Company it acquired not only the immunity from taxation which the Greenville and Columbia Company possessed, but also its original exemption from future legislative control, this exemption ceased when the company obtained an amendment to its charter in September, 1868, before its consolidation with the Georgia Company. By that amendment the charter of the company was at once brought under the control of the legislature by virtue of the act of 1841, the act granting the amendment containing no clause excepting the charter from the provisions of that act.

In whichever way the legislation of the State may be viewed, the same result follows, — that the legislature of South Carolina was not inhibited from subjecting the property of the company to taxation, to restrain the collection of which this suit is brought.

The power of the legislature of a State to exempt particular parcels of property of individuals or of corporations from taxation, not merely during the period of its own existence, but so as to be beyond the control of the taxing power of succeeding legislatures, has been asserted in several cases by this court, although against this doctrine there have been earnest protests by individual judges. But though this power is recognized, it is accompanied with the qualification that the intention of the legislature to grant the immunity must be clear beyond a reasonable doubt. It cannot be inferred from uncertain phrases or ambiguous terms. The power of taxation is an attribute of sovereignty, and is essential to every independent government. Stripped of this power, it must perish. Whoever, therefore, claims its surrender must show it in language which will admit of no other reasonable construction. If a doubt arise as to the intent of the legislature, it must be solved in favor of the State.

It follows that the decree of the court below must be reversed, and the cause be remanded with directions to dismiss the suit; and it is

So ordered.


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