Case Name: Whiting vs. The Sheboygan and Fond du Lac Railroad Company and others
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1870-01
Citations: 25 Wis. 167
Docket Number: 
Parties: Whiting vs. The Sheboygan and Fond du Lac Railroad Company and others.
Judges: 
Reporter: Wisconsin Reports
Volume: 25
Pages: 167–222

Head Matter:
Whiting vs. The Sheboygan and Fond du Lac Railroad Company and others.
Constitutional Law: Limits of the power of taxation —Aid to railroads.
1. A tax for a, private purpose is invalid.
2. In the case of a railroad owned by a private corporation, in whose favor the right of eminent domain may he exercised, the public usé consists in the right of the public to the carriage of persons and property upon tender of a proper consideration, and in the power of the state to control the franchise and limit the tolls.
3. Such a qualified and limited public use will not support taxation for the purpose of raising money to be donated to such a corporation.
4. Ch. 448, Private and Local Laws of 1867, which authorizes the supervisors of a county (after an affirmative vote of the people of the county upon the question, and after certain portions of said company’s road have been graded) to issue county orders in aid of the road, and levy a tax to pay such orders, the county not becoming a stockholder in the company, held invalid, as not a legitimate exercise of the taxing power.
Paihb, J., dissenting, holds that the construction of a railroad is a public purpose, for which the power of taxation, as well as that of eminent domain, may be exercised, although the road is constructed and owned by a private corporation. ,
APPEAL from the Circuit Court for Winnebago County.
Chapter 448, Private and Local Laws of 1867, entitled “ An act to authorize the county of Fond du Lac to aid the completion of the Sheboygan and Fond du Lac railroad, and aid the building of a railroad from the city of Fond du Lac to the city of Rip on,” provided, in substance, that an election should be held in said county to determine whether it would render aid to the former road to the amonnt of $90,000, and to the latter to the amount of $60,000 ; and that if a majority of the votes cast at such election should be in favor of rendering such aid, then, upon certain proof being filed with the clerk of the board of supervisors of said county, showing that the first-named road had been graded continuously between two specified points in said county, the company owning the road should be entitled to receive from the county, within ten days after demand, county orders to the amount of $30,000, payable to bearer on demand, or at a time not exceeding one year from their date, with interest at seven per cent, as the board of supervisors should determine; and whenever like proof should be filed that the road had been graded to another specified point, said company should be' entitled to receive from the county a further sum of $30,000 in county orders, payable on demand, or at a time not exceeding two years from date, as the board should determine ; and when like proof should be filed that the road was fully completed and in running order to the city of Pond du Lac, the company should be entitled to receive from the county a further sum of $30,000 in county orders, payable on demand, or in three years, etc., etc. Similar provisions are made in respect to the extension of aid to the second road above named. The act further provided that if the county should .furnish such aid, -the two railroad companies, their successors • and assigns, should transport wheat upon their roads upon certain specified terms for ten years. It then authorized the board of supervisors of .said county to levy upon all the taxable property of the county “ a tax sufficient from time to time to meet the indebtedness of said county, under the provisions” of the act, “and for the payment of the same; ” and provided for receiving said county orders in payment of such tax. It further provided that, in case the work specified should not be completed, and said orders demanded, within two years from the taking of the vote npon the question, then the same should cease to be binding upon the county, and be of no effect.
In May, 1868, Warren Whiting, “a freeholder, tax payer, citizen and resident of Fond du Lac county,” brought this action “in his own behalf, and in behalf of all others of like interest with himself, to wit, in behalf of himself and all other tax payers” of that county, against the Board of Supervisors of the county, and the clerk and chairman thereof, and The Sheboygan and Fond du Lae Railroad Company. The complaint averred, in substance, that a vote was taken in' said county on the 5th of November, 1867, in alleged pursuance of the above recited act, and that a majority of. the votes cast upon the question were in favor of aid to said railroad; that soon afterward the defendant railroad company, for the purpose of receiving from the county the first sum of $30,000 in county orders above mentioned, commenced grading its road, between the two points first mentioned in the act; that this portion of the road was nearly completed, and the company claimed that when said grading was fully completed it would be entitled to receive said county orders, within ten days after demand, and declared that it intended to make such demand, etc., etc. It was also averred that such demand would b.e made, and such county orders issued, to the' company within thirty days from the date of the complaint, unless said board of supervisors and their chairman and clerk should be restrained from issuing and delivering the same. Similar allegations were made in regard to the intention of the company to complete the grading' of the other two sections of the road, and to demand the other two payments of $30,000 each in county orders, etc.. etc. ; and the provisions of the above recited act in respect to the issue of such orders, the levy of a tax to pay the same, etc., were set forth. And it was averred that there would be no way to distinguish county orders issued under the act from others issued for ordinary county purposes. The complaint then contained various allegations designed to show that the road, when built, would not be advantageous, but rather detrimental, to the interests of the plaintiff and of many other residents and tax payers of said county. Prayer: that said board of supervisors, and its chairman and clerk, be restrained from issuing, and said railroad company from receiving, any county orders in pursuance of said act of the legislature; that all the defendants be forever restrained from taking any proceeding under said act; and that the act be adjudged void.
Upon this complaint, duly verified, and upon an affidavit of one IT. C. Whiting and one Scofield, declaring the allegations of the complaint to be true, a temporary injunction was granted by a court commissioner on the 19th of May, 1868.
The summons in the. action is dated May 28, 1868; but there is nothing in the printed case to show the'date of its service. The answer of the defendants is dated July 7, 1868. Afterward defendants moved to dissolve the temporary injunction; founding them motion upon the pleadings and the affidavit above mentioned,, and upon certain affidavits and exhibits filed in their behalf. The contents of the latter, and of the counter affidavits subsequently filed by the plaintiff, need not be stated here. They related to the questions, whether the construction of the railroads above named would be advantageous or detrimental to the plaintiff and those in whose behalf he brought this action, and whether fraudulent means had been used by agents of the defendant company to prevent a fair expression of the wishes of the people at the election aforesaid, in respect to granting aid to said railroads. On the 12th day of November, 1868, the motion to dissolve was denied; from which decision the defendants appealed.
At the trial, after proof that he was a resident freeholder and tax payer in Fond du Lac county, plaintiff offered testimony to show that the construction of the defendant’ s railway would not be-.advantageous to him, or to persons residing in the town of which he was a resident, or to persons residing in several adjoining towns of said county ;. but the evidence was rejected.
Judgment for the defendants (January 19, 1869); from which the plaintiff immediately appealed. This appeal and that of the defendants were argued here together.
J. A. Bentley and Matt. H. Carpenter, for the defendants,
contended that .the power of the legislature to authorize a municipal corporation to raise money by tax in aid of railroads was completely settled by repeated adjudications of this and other courts ; and they cited Bridgeport v. B. R., 15 Conn. 475 Sharpless v. Mayor of Philadelphia, 21 Pa. St. 148 ; Thomas v. Allegheny Co., 7 Law Reg. 92-; Talbot v. Dent, *’9 B. Mon. 526; Cheaney v. ■HJooser, id. 330 ; Blade v. Maysville, 13 id. 1, 30, 31; Goddin v. Crump, 8 Leigh, 120; Nichol v. Nashville, 9 Humph. 252 ; Railroad Co. v. Clinton Co., 1 Ohio St. 77; Bteubenville, &e., R. R. Co. v. Township, id. 105 ; Cass v. Dillon, 2 id. 607; Bhaw v. Dennis, 5 G-ilm. 405 ; Ryder v. Railroad, 13 Ill. 516 ; Btriddand v. Railroad, 21 Miss. 209 ; Dubuque Co. v. D. & P. Rw., cited in Redfield on Railways, 534; V. B. & T. Railroad v. Ouachita, 11 La. Ann. 649; Parker v. Bcogin, id. 629 ; People v. Brooklyn, 4 Corns. 419. This question has been repeatedly before this court, and has been determined -in harmony with the foregoing cases: Bushnell v. Beloit, 10 Wis. 195; Clark v. Janesville, id. 136 ; Hasbrouck v. Mihoaukee, 13 id. 37; 17 id. 266 ; Dean v. Madison, 9 id. 402. The objection thatthe county did not receive stock of the railroad company is of n.o avail. The public benefit, which the legislature and the electors have determined will result from this improvement, is a sufficient consideration. Boens v. Racine, 10 Wis. 271; Hasbrouck v. Milwaukee, 13 id. 37.
Bennett & Norci'oss, for plaintiff:
The property of the citizen cannot be taken for any other than a public use. In 'the Mattel' of Albany street, 11 Wend. 149 ; Bloodgood v. M. & II. JR. JR. Co., 18 id. 59 ; In the Matter of John and Cherry Streets, 19 id. 659 ; Varíele v. Smith, 5 Paige, 187, Taylor v. Porter, 4 Hill, 147; Embury v. Conner, 8 Corns. 511; Symonds v. City of Cincinnati, 14 Ohio, 147; Bradley v. JR. R., 21 Conn. 294 ; Dunham v. Williams, 36 Barb. 136 ; Pratt v. Brown, 3 Wis. 603 ; Reeves v. Treasurer of Wood Co., 8 Ohio St. 344; Cooley’s Const. Lim. 530. Such property can be taken for a public use, only upon condition of making full compensation. Const, of Wis., art. 1, sec. 13 ; Ordinance of 1787, art. 2. The compensation here referred to means a compensation in money. Cooley on Const. Lim. 559 ; Fletcher v. Peclc, 6 Craneh, 145 ; Bradshaw v. Rogers, 20 Johns. 103 ; The People v. Mayor* &c., of Broolclyn, 4 N. Y. 419 ; Carson v. Coleman, 3 Stockton, 106 ; United States v. Minn., &c. R. R. Co., 1 Minn. 127; Railroad Co. v. Ferris, 26 Tex. 603 ; Curran v. Shattuclc, 24 Cal. 247 ; Stale v. ‘ Craves, 19 Md. 351; Bennett’s Shelford on Railways, 441; Reitenbaugh v. R. R. Co., 21 Pa. St. 100 ; Robbins v. R. R. Co., 6 Wis. 636, 642, 643;' Shepardsonv. R. R. Co., id. 605 ; Norton v. Peclc, 3 id. 714, 722, 723; Powers v. Bears, 12 id. 213 ; Newell v. Smith, 15 id. 101. On these grounds counsel argued that the act of 1867, in question, could not be upheld as an exercise of the right of eminent domain. 2. The act cannot be upheld as an exercise of the power of taxation. Money can be raised by taxation only for public pur-' posies. 2 Burr. Law Die. 509, under the word “Tax;” Blackw. on Tax. Tit. 7 ; 11 Johns. 80 ; 2 Inst. 532 ; Car-thew, 438 ; Cooley’s Const. Lim. 479 ; Booth v. Woodbiory, 5 Am. Law Reg. (N. S.) 202 ; 21 Pa. St. 168 ; Knowllon v. Supervisors, <&<?., 9 Wis. .418; Brodhead v. Milwaulcee, id. 652, 665. This railroad company is a private corporation {Powers v. Bears, 12 Wis. 221; Redf. on R. W. 53, 54, and note 7; Tract, Senator, in Bloodgood v. M. 6 JH. R. R. Co'., 18 Wend. 59), and money cannot be raised by taxation to be given to snob a corporation. Phil. Association v. Wood, 39 Pa. St. 73; see also tbe remarks of Cole, J., in Newell v. Smith,' 15 Wis. 104, 105, and note by Judge Redfield to Todd v. Austin, Am. Law Reg. Jan. 1869, p. 19. Tbe fact that a majority of tbe electors of Pond dn Lac county voted in favor of imposing this tax is immaterial. If tbe legislature can levy this tax with tbe consent of a majority of the people, it can do so without that consent. Town of Guilford v. Chenango Co., 3 Kern. 143. 3. Taxation in this state is required to be uniform. If this tax is imposed on tbe ground of a local benefit, tbe taxing district is too broad, since it includes tbe residents of several towns which will be injured rather than benefited by tbe road. A still more serious objection to tbe law is, that it taxes all classes of people for tbe benefit, of those'who have wheat to send to market. Cypress Pond Braining Co. v. Hooper, 2 Met. (Ky.) 354; City of Covington «. South-gate, 15 B. Mon. 498; Morford r>. Unger, 8 Iowa, 82; Langworthy n. Dubuque, 13 id. 86; Fulton r>. Davenport, 17 id. 404; Buell v. Ball, 20 id. 282; Tyson v. School Directors, 51 Pa. St. 9; Freeland v. Hastings, 10 Allen, 575 ; Merrick v. Amherst, 12 id. 504; Cooley’s Const. Lim. 494.
Conger v. Sloan, on tbe same side,
argued, among other things, 1. That tbe only solid ground upon which the distinction between a public and a private purpose, in the use of money raised by taxation, can rest is, that in the one case the title to the thing constructed or acquired with the money vests in the public, and in the other it vests in an individual or private corporation. We admit that money may be raised by taxation by a municipal corporation, if authorized by the legislature, to build a railroad, and we do not see why it might not also .be so raised to operate a horse railroad, a line of stages, a bank, a store, a hotel, a mill, or a mechanic’s shop, to be owned by the municipal corporation. But we deny that money can be so raised to build or operate any of these things for an individual or a private corporation. Yet the incidental benefit to the public would be the same whether any of these enterprises were owned and conducted by the municipal corporation or by a private-corporation. The only difference would be, that in the one case the direct benefits (that is, the profits, if any) would go to the tax payers whose money is taken; and in the other they would not. No court has gone to the length of holding that money raised by taxation can be donated to a private corporation. The decision in Sharp-less v. The Mayor, etc., is distinctly placed upon the ground that the municipal corporation obtains title to that portion of the road constructed with the money raised by taxation. 2. If a municipal corporation could raise money by taxation, to be paid to a private corporation, to provide for constructing and operating a railroad, there must be some guaranty that the road will be operated. This act only provides for the grading of the road. A' railroad which is only graded can be of no use to the public. The act, therefore, falls short of securing any public benefit whatever, and is void.
On the motion for a rehearing, the question of legislative power was re-argued by the several counsel.
J. A. Bentley and Matt. H. Carpenter,for the motion:
- If the building of a railroad be not a matter of public importance and benefit, -the right of eminent domain, which, by the constitution of the United States and by that of every state in the union, is confined to the taking of private property for the public use, could never have been exercised in favor of such work. Fortunately for the progress of our country, the opposite view was taken in all-courts and places, until it came to be a part of the settled law of the land. The express language, of the constitution limits the exercise of the right of eminent domain to the taking for a public use; and there is no such express limitation upon the taxing power, though it is conceded that it ought not to be exercised for any other purpose. To say that an express limitation upon the power of the legislature is less entitled to favor in the courts, than one which they deduce from general principles of natural justice, is to say that all written constitutions are not only useless but absolutely pernicious. Counsel then cited and commented upon the following cases as establishing the doctrine that the construction of a railroad is a public use for which private property may be taken by the government: Beekman v. S. <&S. B. R. Co., 3 Paige, 45; Bloodgood ■». M. & H. JR. JR. Co., 18 Wend. 1; Pratt v. Brown, 3. Wis. 612; Robbins v. R. R. Co., 6 id. 636. 2. Can the legislature authorize a county to build a railroad, or contribute toward the building of one, by direct payment of money ? While the powers of the general government must be sought in express words of grant, or reasonably implied from what is expressly granted, the states have all the powers of sovereignty not denied tp them by their respective constitutions. In inquiring whether a given statute passed by a state legislature is constitutional, it is for those who question its validity to show that it is forbidden. People v. Draper, 15 N. Y. 543 ; Thorp v. R. R. Co., 27 Yt. 142 ; Town of Guilford v. Chenango Co., 13 N. Y. 145 ; Leggett n. Hunter, 19 id. 445 ; Cochran v. Van Surlay, 20 Wend. 365; People v. Morrell, 21 id. 563; Taylor r>. Porter, 4 Hill, 141; Sears ■?>. Cottrell, 5 Mich. 251; Mason n. Wait, 4 Scam. 134. Our state con- ^ stitution contains provisions which regulate the mode of exercising the power of taxation, but contains no limitation upon the power (Blanding «. Burr, 13 Cal- 343), and courts have no right to impose such limitations. People -v. Brooklyn, 4 N. Y.~ 428; Wynehamer n. The People, 13 id. 429 ; People n. Draper, 15 id. 532 ; People v. Mahany, 13 Mich. 500 ; Sharpless v. the Mayor, etc., 21 Pa. St. 147; Cooley’s Const. Lim. 168, cases cited in note {a), But, not to insist upon this, it may be admitted that a tax for an object in which the public hace no possible interest is unconstitutional, and may be declared void for that reason by the courts. But as to wbat is meant by the public interest, see Cooley’s Const. Lim. 488. ‘/To justify a court in arresting the [tax] proceedings, and declaring the tax void, the absence of all possible public interest in the purposes for which, the funds are raised must be clear and palpable, so clear and palpable as to be perceptible by every mind at the first blush.” Brodhead v. Milwaukee, 19 Wis. 652; see also Boms v. Racine, 10 id. 271; Hasbrouck v. Milwaukee, 13 id. 43 ; Booth v. Woodbury, 32 Conn. 128. The principles affirmed in these cases must be entirely overruled before the act here in question can be pronounced unconstitutional by the court. 3. It is óf no consequence' whether the money raised by,taxation is to be paid to a public or a private corporation, or to an individual. In the case of eminent domain, the state may take the land itself, or it may authorize a public or private corporation or an individual to take it; provided always that it be taken for a public use. When a corporation or individual is empowered to take the property, it is the state that takes it, and the corporation or individual is the mere agent of the state for that purpose. All the turnpike roads of the eastern states, when turnpikes held to the interests of commerce the same relation' now held by railroads, were built by this joint effort of the public and of individuals. In almost every instance, the turnpike [company was authorized to take a highway which had been built by taxtion on land condemned by the public through the right of eminent domain ; and in some cases the public was taxed to aid in building the road for the company. Oouch v. Ulster Turnpike Co., 4 Johns. Ch. 26; Turnpike Co. v. Bishop, 11 Yt. 198; Turnpike Co. v. Baker, 4 Humph. 415. 4. The fact that the money to be raised here is to be donated, and that the county does not become a stockholder in the company, is immaterial. The language of the court in Brodhead r. Milwaukee and in Hasbrouck v. Milwaukee cannot be reconciled with, the idea that the county must be a stockholder -in the railroad company, in order to justify the tax. To hold ■ this idea, is to basé the right of the legislature to impose taxes in aid of railroads, not. upon the substantial ‘benefits to be realized, but upon a mere fiction, utterly barren of practical benefit to the people; since it is well known that not a dollar was ever realized by any town or county in Wisconsin as a dividend on stocks.' No case can be found which holds the tax valid upon the ground of the stock, nor one which even mentions the stock as important ; but every case rests the validity of the tax upon the ground that it is raised for the purpose of aiding a great public improvement. The only cases which mention the taking of stock at all (besides Sweet v. Hul-bert, 51 Barb. 316) are, City of Bridgeport r>. Housatonic B. R. Co., 15 Conn. 475; State of Iowa v. County Judge of Wapello, 9 Iowa, 288; and Gibbons v. R. R. Co. 36 Ala. 410; and in these, the taking of the 'stock is considered either as of no consequence in ¡Supporting the tax, or as an objection to its validity. In Sweet v. HuTbert, the objection taken to the tax is, that no equivalent, real or imaginary, is contemplated by the- act, or none certainly secured, before the issue and 'delivery of the bonds; an objection which does not apply here. 5. It is a mistake to say, that a railroad company is as independent of the government in the right to carry'oh its business, the use of its property, etc.,.as an individual would be. Such a company, from first to last, is a creature of tjie law, an agent of the state, exercising sovereign franchises, subject to the public will; ‘and in' this state its charter may be repealed- at the pleasure of - ■ the legislature. State v. Railroad Co., 25 Yt. ,-442;- R. ■ R. Co. v. Chappell, 1 Rice (S. C.) 383; Beehrrian ®. R: R. Co., 3 Paige, 74/75; Queen v. Eastern ■ Counties R. R. Co., 10 Ad. & E.-531; State v. R, R.y 29 Conn. 538; Kean v. Johnston, 1 Stockt. 401; Bagshaw E. U. Railway Co., 7 Hare, 114; G. H. Railway Co. v. Eastern Counties Railway Co., 9 id. 306; WorhS’ ■». ■ Junction It. JR., 5 McLean, 425; Worcester v. It. It., 4 Met. 566 ; King v. Severn Railway, 2 Bam. & Aid. 646 ; Walford on R. W. 298, 299 ; Angelí on Highways, 1, 18, 370. All railroads are post roads by act of congress. Brightly’s Big. 767, § 55, and 769, § 71; R. S. Wis., ch. 79, §§ 27, 43; Laws of 1859, ch. 58. The states have always granted to railroads right of way through the public lands ; and congress has, for years, granted land to the states in aid of railroads. If the view here controverted is true, all such grants must be condemned.
Conger & Sloan, for the plaintiff:
It is said that the power of eminent domain can be exercised only when the property is taken for a public use. And it is assumed that the same public use which will authorize a right of way to be taken under the power of eminent domain, will also authorize money to be raised by taxation and paid over to any individual or private corporation in whose favor the power of eminent domain can be exercised. But these two branches of sovereign power are distinct, and proceed upon different principles. The one takes specific property for public use, but awards- full compensation. The other is defined to be a rate or sum of money assessed on the person or property of a citizen by government, for the use of the nation or state. Burrill’s Law Bic. We apprehend that an important distinction between these powers is, that property taken by the power of eminent domain may be taken for the use of the persons who compose the public, in their individual capacity. Such is the case when the right of way is taken for a railroad, or when land is taken to create water power for a mill, or for a turnpike. In none of these cases has the government of the state any connection or concern beyond the act of delegating the power of eminent domain to the individuals or private corporations engaged in these enterprises. On the other hand,' money raised • by taxation is taken for the use of the state or nation in its organized political capacity as a government. It results from this distinction that property might well be taken under the power of eminent domain, which would remain the subject of a perpetual use by the individuals who compose the public as the people of a state, although the title be transferred to a private corporation. It would in such a case be a matter of comparative insignificance to the owner of the property taken, whether the title went to the government or to a private corporation, as in either case full compensation must be made before it can be taken. And it would be of as little importance to the people generally, as the use for which it would be taken and held would be secured to them equally in either case, for the moment such use ceased, it would revert to the ■ original owner. But the use of money raised by taxation consists wholly in its exchangeable value or purchasing power; and it oan only be exacted by the state or nation to defray the public charges. In other words, the state takes money from individuals as their share of the public burdens. And it is an inexact use of language to say that money raised by taxation is taken for the public use, without distinguishing between a use by the people in their individual capacity as citizens, and a use by the government in its organized capacity. The legislature can raise money by taxation without limit for the use of the government of the state, or to discharge the burdens resting upon it; but it cannot raise money by taxation for the use of, or to discharge the burdens resting upon, the persons who compose the public, in their individual capacity as citizens. It is this distinction which makes the boundary between the power of eminent domain and that of taxation.
It is true that there is no express constitutional prohibition upon the exercise of the power of taxation here claimed. The reason undoubtedly is, that while history furnishes many examples of the rapacious conduct of governments in taking the property of citizens for their own purposes without compensation, no government of any civilized country, however despotic, had ever claimed, or attempted to exercise, the right to take, without compensation, the property of one class of citizens and give it to another. In these latter days the attempt has sometimes been made, as this case shows; but, whenever it has been made, courts have everywhere held that no such power has been granted to the legislative branch of government, and that all acts having such an object in view were wholly void; and the prohibition is as imperative as though found in the express provisions of the constitution.
Bennett & Norcross, on the same side,
argued, among other things, that even the right of eminent domain cannot be exercised except when a public éxigency or necessity requires it; and, therefore, it can be exercised in behalf of railroads only to secure a right of way, and not by permitting them to take land for car factories, or to seize timber, iron, etc., for the construction of the road; and still less can the taking of the money of citizens for the use of private railroad corporations be justified. In support of these views they cited Jordan v. Woodward, 40 Me. 317; 1Hldridge v. Smith, 34 Yt. 484; Lancé s Appeal, 55 Pa. St. 16; West River Bridge Co. v. Dix, 6 How. (U. S.) 545, 546 ; Gordon v. Railway Go., 2 Railway Cas. 809. To the point that the power of taxation can be exercised only to compel each man to meet his share of some public burden, and not in every case where the public has some interest, or may have derived some possible benefit, they cited Freeland v. Hastings, 10 Allen, 575; FMladelphia Association v. Wood, 39 Pa. St. 82; Tyson v. School Directors, 51 id. 9 ; Curtis v. Whipple, 24 Wis. 350; Sweet ■». HvLbert, 51 Barb. 316; Hansen v. Vernon, Sup. Ct. of Iowa, 3 Western Jurist, 134.
The following opinion was filed at the June term, 1869 :

Opinion:
Dixow, C. J.
These are two appeals in the same action, the one by the plaintiff from a final judgment dismissing Ms complaint, and the other by the defendants from a previous order of the court denying their motion to dissolve and vacate a preliminary injunction which had been granted in the cause on the application of the plaintiff. The question involved in these appeals is the same as that discussed in the recent case of Curtis v. Whipple (24 Wis. 350), and after what was there said in relation to it, a very lengthy examination will not be necessary. The question is as to the power of the legislature to raise money, or to authorize it. to be raised, by taxation, for the purpose of donating it to a private corporation. We there held that the legislature possessed no such power, and the ^conclusion in that case we think follows inevitably in this, from the principles stated in the opinion. The cases are not distinguishable, except in the single circumstance that the corporation here, to which it is proposed to give the money, is a railroad company in behalf of which the power of eminent domain has been exercised by the state for the purpose of enabling it to secure the land over which to build its road. It is contended that this circumstance so completely separates the cases as to render wholly inapplicable to a railroad company a fundamental principle with regard to the power -of taxation, which controls as to all other private corporations, and prohibits the making of similar donations to them — in other words, that it changes the corporate character of such company, and transforms it from a private into an altogether public corporation, so that the people may be taxed for the purpose of giving the money directly to it. If this position were correct, then undoubtedly the deduction would be that the taxation is valid. But we deny the correctness of the position, and, on the contrary, affirm that though a railroad company may be, as to its capacity to assume and exercise in the name of the state the power of eminent domain delegated to it, so far a public or quasi public corporation, yet in all its other powers, functions and capacities it is essentially a private corporation, not distinguishable from any other of that name or character. As to the use of the land for th,e purpose of a highway, and the right of the public to pass and repass over it and enjoy the advantages afforded by it for the transporation of the merchandise and productions of the country from one place to another upon the payment of reasonable fare or charges, the corporation may perhaps be said to be public, but in all other respects it is private. The public having the power for itself to condemn the land on payment of júst compensation, and to build, equip and operate the road, and to charge toll or fare for'its use, or for the carriage and transportation of passengers and merchandise, that power, subject to the continued enjoy ment by the public as a matter of right, and not by permission of the corporation only, of the same benefits of carriage and transportation upon the same conditions as to payment of fare and charges, may be exercised in behalf of a private corporation, and so far changes its character, but no farther. That such is the true corporate character of a railroad company is a proposition, we think, requiring very little argument or elucidation. It is plain to the mind of every intelligent person who has given the subject the slightest consideration. The road, with all its rolling stock, buildings, fixtures and other property pertaining to it, is private property, owned, operated and used by the company for the exclusive benefit and advantage of the stockholders. This constitutes a private corporation in the fullest sense of. the term, and were we to attempt to distinguish between such a corporation and an incorporated institution of learning like that in Gurtis v. Whipple, and to show that money might be raised by taxation to be given to the former, but not to the latter, it would be a task which we should despair of accomplishing to the satisfaction of any one not far more skilled in. the subtleties of the law than we ourselves profess or ever expect to be.
And if we examine any book of authority on the sub ject, we shall find that such is and always Eas been tEe rule of tEe law as to tEe corporate character of sucE companies, notwithstanding tEe delegation of the power of eminent domain, and tEeir consequent subjection in a certain degree to public use and convenience. They are always classed among private corporations, such as banking, insurance and manufacturing corporations, and corporations ,f°r the building of bridges, turnpikes, canals, etc. Messrs. Angelí and Ames, in their work on corporations, section 40, expressly so classify them, and, speaking of them in connection with those last above named, say : " TEe latter kind Eave a concern witE some of the expensive duties of the state, tEe trouble and charge of which are undertaken and defrayed by them in consideration of a certain emolument allowed to their members." As a matter of law, the duties of railroad companies to receive and carry passengers and goods differ very slightly, if at all, from those of other common carriers of passengers and goods, whether private individuals or copartnerships, or incorporated bodies. All common carriers are bound to receive and carry when paid or tendered a reasonable compensation. The public use and convenience is the same with one class of common carriers as with another — the same with an incorporated stage coach or steamboat company as with a railroad company ; and yet no one, we think, would pretend that taxation could be resorted to for the purpose of aiding the former, while all the property, gains and emoluments belong to the individual stockholders. All private corporations are more or less for pubHc use. If they were considered of no public utility or advantage, it is presumed they would never be chartered. It enters into the very definition of a private corporation, that given in Bonaparte v. The Camden and Amboy Railroad Company (1 Bald. C. C. 223), that they are -for tEe public use and convenience. Mr. Justice Baldwin says: "Private corporations are for banks, insurance, roads, canals, bridges, etc., wEere tEe stock is owned by individuals, but their use may be public'' And Messrs. Angelí and Ames, section 31, after quoting this •language, add: "In all the .last-named, and other like corporations, the acts done by them are done with a view to their own interest, and if thereby they incidentally promote that of the public, it cannot be reasonably supposed they do it from any spirit of liberality they have beyond that of their fellow citizens. Both the property and sole object of every such corporation are essentially private, and from them the individuals composing the company corporate are to derive profit."
But a railroad' company, like a company for running stage coaches or steamboats, might be incorporated, and the road built, equipped and operated, the public use and convenience being the same, without the delegation of the po.wer of eminent domain. Money will secure the .title to land, over which to build a road, by contract with the owners, and it is a matter of policy on the part of the state whether it will delegate the power of eminent domain or not. If a road were built and operated by such a company, could money be raised by taxation for the purpose of giving it to the company % Or if a railroad were built by one or more individuals, without any act of incorporation, and without the exercise of the power of eminent domain, as it is conceived might be done, could the people be taxed in order to give the . Inoney to such individual or individuals ? Can a rail-toad be built and put in running order by direct taxation, and then the whole property transferred by act of the legislature, without compensation or equivalent, to one or more private individuals, or to a corporation composed of such individuals, created for the purpose of receiving it ? . Or can a corporation, composed of one or more individuals, be created for the purpose of owning and operating a railroad, and holding and enjoying all its gains and emoluments, and at the same time the charter, provide that the corporators or stockholders shall pay nothing, but that the road shall be built, equipped and put in running order at the expense of the people, to be defrayed by taxation ? The majority of this court are constrained to believe that the legislature possesses no such powers, and that all these questions must be answered in the negative. Such proceedings, provided they were proper or could be sustained, would deserve the opprobrious epithet given to them by Judge James, in Sweet v. Hulbert, 51 Barb. 316, where, speaking of an act of the legislature of New York, precisely like that involved in these appeals, he says : "If this can be done, it is legal robbery ; less respectable than highway robbery, in this, that the perpetrator of the latter assumes the danger and infamy of the act, while this act has the shield of legislative irresponsibility."
If, as we have supposed, the granting of the right of eminent domain to a railroad company may so far change its corporate character as to clothe it with the power of the state, and, in consideration of the emoluments allowed to its members, charge it with the performance of a duty of the state, namely, that of providing suitable and proper thoroughfares through it for the benefit and convenience of the people, we have still endeavored to show that the character of the company remains in every other respect the same as if no such grant had been made. Nor is this mixed public and private character of the company any thing strange or anomalous in the law of corporations. It is well known, for example, that a state may take upon itself the character of a private citizen or corporation, by becoming a partner or stockholder in a private trading company or corporation, and that public and municipal corporations may stand in respect to some things, as grants made to them by the state or under its authority, on the same footing as would any individual or private corporation, upon whom a like special franchise may have been conferred. Angelí and Ames on Corp., § 31, 32, 33, and cases cited. Our conclusion, therefore, is, that though a railroad company may pos sess this single exceptional corporate characteristic, it is, nevertheless, essentially a private corporation, coming fully within the operation of the principles laid down in Curtis v. Whipple, and that the taxation complained of cannot be sustained. This conclusion i& fully supported by the case of Hansen v. Vernon, as yet unreported, in the supreme court of Iowa, December term, 1868, and the case of Sweet v. Hubert, above referred to, which are the only cases known to us where the question here presented has been directly raised and decided by the courts. The opinions in both cases are very able, and clearly and fully sustain the position taken by counsel in the able arguments made at the bar in this case.
It only remains for us to add a few words, if, indeed, the same can be thought necessary, by way of distinguishing between this, and those numerous cases where it has been held that cities, towns and counties can subscribe for the stock in a railroad company, and discharge the debt thus incurred by the assessment and levy of taxes. The principle upon which such taxation has been sustained will readily appear by a reference to the opinion in Curtis ». Whipple. The city, town or county becomes a part owner of the road, to the extent of the stock taken, and the work being one which the public might have engaged in as the sole owner, and paid for entirely out of the public funds, it has been considered that there was no valid objection to its becoming a part owner thereof as a stockholder in a private corporation which has undertaken to do the same work. To the extent of the stock taken, the city, town or county is directly interested and benefited by the money expended in the work, the same being a matter of public concern, and it is, in our judgment, upon this principle, and this alone, that the taxation in that class of cases can be sustained. In saying this, we, of course, do not intend to exclude the idea, found in all the cases, that the road must be one situated within or passing through the corporate limits of the municipality to be taxed, and so promoting the general prosperity and welfare of the people who are to pay the taxes. Cooley's Constitutional Limitations, 214, and cases cited. The two things must unquestionably concur, in order to sustain the tax, but the last alone, which may be termed the benefit incidentally arising to the public, is clearly insufficient for the purpose. The property in the road having, by the creation of the corporation and the franchises granted to it, been converted into private property, devoted exclusively to the gains and emolument of the individual stockholders, the incidental benefits accruing to the public by reason of the investment, can no more sustain a tax than the like incidental benefits arising to the public from the employment of the capital or labor of the citizens in any other business or enterprise of a purely private character. For, if such incidental public bene- . fits or advantages alone will support a tax for a donation of money to persons or corporations engaged in one kind of private business, then they certainly must in another, and if it should be shown, as it undoubtedly can in numerous towns and places, that the establishment of mills and manufactories would be greatly beneficial to the inhabitants, far more so, perhaps, than the building of a railroad, then it would follow that the people of such towns and places could be taxed for the purpose of giving the money to persons or corporations proposing to build such mills or manufactories. This laist is a proposition upon which no one will insist; and we are clearly convinced that that contended for in this case is equally untenable.