Source: https://supreme.justia.com/cases/federal/us/130/637/
Timestamp: 2019-04-19 10:41:47+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 130 › Picard v. East Tennessee, Virginia & Georgia R. Co.
Legislative immunity from taxation is a personal privilege, not transferable, and not to be extended beyond the immediate grantee unless otherwise so declared in express terms.
Immunity from taxation does not pass to the purchaser at a sale of "the property and franchises of a railroad corporation" to enforce a statutory lien. Morgan v. Louisiana, 93 U. S. 217, on this point affirmed.
Although a grant of immunity from taxation by a legislature to a corporation has sometimes been held to be a privilege which may be transferred, the later and better opinion is that unless other provisions remove all doubt of the intention of the legislature to include the immunity in the term "privileges," it will not be so construed.
The property of the East Tennessee, Virginia and Georgia Railroad Company, situated in the State of Tennessee, is not exempt from taxation under the laws of that state.
or municipal, police or other authority thereof, or of any town, city, county, or district thereof, to impose any tax on such stock or dividends, property or estate."
Acts Tenn. 1849-1850, c. 76, § 40.
It does not appear that any organization of this company was ever perfected. It is stated by counsel that none ever took place, and it would seem that such was the conclusion of this Court in Goodlett v. Louisville Railroad, 122 U. S. 391, 122 U. S. 406.
the property of the Cincinnati, Cumberland Gap, and Charleston Railroad Company, inasmuch as it invests that company with the "rights, powers, and privileges . . . of the East Tennessee and Virginia Railroad Company." Statutes of Tenn. 1853-1854, c. 325, § 6. The act incorporating this last company declared that its capital stock should be forever exempt from taxation and that its road, "with all its fixtures and appurtenances, including workshops, warehouses, and vehicles of transportation," should be exempt from taxation for the period of twenty years from the completion of its road, and no longer, and that the road should be commenced within five years after the passage of the act, and be finished within ten years thereafter; otherwise the charter should be void. Statutes of Tenn. 1847-1848, c. 120, §§ 30, 31.
The answer avers that the road has never been completed, and no proof was offered to refute this averment. The burden of proof to show the completion was upon the complainant, for until then the exemption claimed could have no existence, even while the property remained in the possession of the Cincinnati, Cumberland Gap, and Charleston Railroad Company.
security for the loan of her bonds issued to the company, and the sale made under the decree, and confirmed, was of the "property and franchises" of the railroad company.
By this sale and the conveyance which followed, immunity from taxation did not pass. Such immunity is not in itself transferable. It has been held, and the doctrine has been so often repeated that it is no longer an open question, that the legislature of a state may exempt the property of particular persons or corporations from taxation either for a limited period or perpetually, but, to justify the conclusion that such exemption is granted, it must appear by language so clear and unmistakable as to leave no doubt of the purpose of the legislature. The power of taxation is one of the highest attributes of sovereignty, and the suspension of its exercise as to any persons of property is not a matter to be presumed or inferred. It must be declared, or it will not be deemed to exist. If the legislature can lay aside a power devolved upon it for the good of the whole people of the state, for the benefit of a private party, it must speak in such unmistakable terms that they will not admit of any reasonable construction consistent with the reservation of the power. The Delaware Railroad Tax, 18 Wall. 206, 85 U. S. 225.
take tolls, to appropriate earth and gravel for the bed of its road, or water for its engines, and the like. They are positive rights or privileges without the possession of which the road of the company could not be successfully worked. Immunity from taxation is not one of them. The former may be conveyed to a purchaser of the road as part of the property of the company; the latter is personal, and incapable of transfer without express statutory direction."
It is true there are some cases where the term "privileges" has been held to include immunity from taxation, but that has generally been where other provisions of the act have given such meaning to it. The later, and we think, the better opinion is that unless other provisions remove all doubt of the intention of the legislature to include the immunity in the term "privileges," it will not be so construed. It can have its full force by confining it to other grants to the corporation.
The case of Railroad Company v. County of Hamblen, 102 U. S. 273, was, with the exception of one particular, substantially like the one before us. The claim of exemption founded upon the Act of December 22, 1853, referring to the charter of the East Tennessee and Virginia Railroad Company, was not there relied upon. Reliance was, however, placed upon the act chartering the Nashville and Louisville Railroad Company as exempting the property of the Cincinnati, Cumberland Gap, and Charleston Railroad Company from taxation. The Court held that immunity from taxation did not pass to the purchaser upon the sale of the property under the decree rendered in the suit brought by state against the company.
Reversed, and the cause remanded, with directions to dismiss the bill, and it is so ordered.

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