Source: https://en.m.wikisource.org/wiki/Home_of_the_Friendless_v._Rouse
Timestamp: 2019-04-22 19:10:03+00:00

Document:
The sections thus referred to provided, that the charter of every incorporation that should thereafter be granted by the legislature should be subject to alteration, suspension, and repeal, at the discretion of the legislature.
The corporation was organized and set in action, and by gifts, grants, and devises, had acquired a considerable amount of real estate in St. Louis. A constitution, adopted by the State, in the year 1865, authorized the legislature to impose certain taxes, and soon after, the legislature did impose a tax upon the real property of the Home. The corporation declining to pay, the collector of taxes for the county was about to levy on and sell its real estate, when the corporation filed a bill in one of the State courts, praying for an injunction against collecting the taxes, on the ground that they were illegally assessed, all property of the Home being, by its act of incorporation, expressly exempted from taxation at all times. The defendant interposed a demurrer, which was overruled, and the judgment on the demurrer made final. The cause was removed to the Supreme Court of the State, and resulted in the reversal of the judgment of the lower court, and the dismissal of the bill or petition.
The case was now here for review; and Supreme Court of Missouri certifying, as a part of the record, that in the determination of the suit there was necessarily drawn in question the construction of that clause of the Constitution of the United States, which prohibits a State from passing a law impairing the obligation of a contract, and that the decision was against the right claimed by the complainant, and was necessary to the adjudication of the cause; thus bringing the case clearly within the 25th section of the Judiciary Act, which gives to this court in such cases a power to examine and affirm or reverse the decision of the State court.
1. The charter contains not only an explicit promise on the part of the State, that whatever property should be owned by this charity should not be taxed, but, what is very unusual, if not unprecedented, it contains an assurance that the legislative power should not thereafter be used to interfere with this franchise.
The discretionary authority which the legislature reserved, in regard to corporations in general, it is declared, shall not exist as to this corporation.
The charter in express terms, holds out to the benevolent persons to whom it is addressed, that, if they will take upon themselves the burden of organizing this corporation, of making themselves, and soliciting from others, donations and grants, and of administering its affairs for the relief of suffering female poor of the city of St. Louis, the funds thus obtained, devoted, and held, shall not be diminished by taxation.
3. The rule of construction applicable to laws relied upon as contracts, granting to corporations special advantages, to the detriment of the public, is that they shall be construed strictly against the corporation.
The legislature of 1853 omitted to provide for any advantage in the future to the State, which should be commensurate with the greater and growing advantage to the institution, which would accrue from the increase of taxes appropriated to its use with the increase of its property. The law shields the Home from rendering any account of the amount of public funds thus devoted to its use, and authorizes an unlimited increase.
Reply.-To suppose that any consideration beyond the public objects for which this corporation was created was necessary as a basis of a contract is a mistake. The consideration is found in the nature of those objects, the acceptance of the charter, and the consequent implied undertaking to use its franchises in the way and for the purposes in which they were granted.
This has been the settled law of this court since the Dartmouth College case,  and is fully set forth anew of late, in the Binghamton Bridge case,  as the continuing and unalterable judgment of the court.
^1 See the cases collected in Cooley's Constitutional Limitations, 279-81.
^2 Rector of Christ Church v. County of Philadelphia, 24 Howard, 300; East Hartford v. Hartford Bridge Co. 10 Id. 511, 535; Commonwealth v. Bird, 12 Mass. 443, cited in 24 Howard, 300, 303; Providence Bank v. Billings, 4 Peters, 561.
^3 Charles River Bridge v. Warren Bridge, 11 Peters, 536, 583; Butler v. Penn., 10 Howard, 402.
^4 Phalen v. Virginia, 8 Howard, 163; Bank of Columbia v. Okely, 4 Wheaton, 235; Aspinwall v. Commissioners, 22 Howard, 364.
^5 State Bank of Ohio v. Knoop, 16 Howard, 378; Commonwealth v. Bird, 12 Massachusetts, 443; Brewster v. Hough, 10 New Hampshire, 139; People v. Roper, 35 New York, 629; Mott v. Pennsylvania Railroad Co., 6 Casey, 9; Commonwealth v. Easton, 10 Barr, 442; Gardner v. State, 1 Zabriskie, 557.
^6 Satterlee v. Matthewson, 2 Peters, 413; Watson v. Mercer, 8 Id. 110; Railroad v. Nesbit, 10 Howard, 401.

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