Court Opinion

ID: 8188533
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:11:22.288963+00
Date Added: 2024-06-11T16:40:31.033525
License: Public Domain

*519The following opinion was filed July 16, 1906:
Cassoday, C. J.
(concurring). I fully concur in the reversal of each of the four judgments in these cases. The case presented, in my opinion, fails to show that the defendants have incurred the penalty prescribed by the sections of the statutes upon which the several actions were brought. But I dissent, respectfully, from so much of the opinion of the court as holds, or tends to hold, that the exactions by the state from railway companies during the fifty years immediately preceding the present ad valorem tax law were not taxes upon property within the meaning of the provision of the constitution which declares that “the rule of taxation shall be uniform, and taxes shall be levied upon such property as the legislature shall prescribe.” Sec. 1, art. VIII, Const. I will briefly state the grounds of my dissent.
Of course, as often held by this and other courts, that provision, though affirmative in form, is not a grant to, but a limitation upon the powers- of, the state legislature. Wis. Cent. R. Co. v. Taylor Co. 52 Wis. 37, 59, 8 N. W. 833; State ex rel. Graef v. Forest Co. 74 Wis. 610, 615, 43 N. W. 551; State ex rel. Weiss v. District Board, 76 Wis. 177, 210, 44 N. W. 967; State ex rel. Lamb v. Cunningham, 83 Wis. 90, 146, 147, 53 N. W. 35; Bittenhaus v. Johnston, 92 Wis. 588, 595, 66 N. W. 805. Such limitation was for the manifest purpose of protecting citizens and taxpayers from oppressive taxation. 1 Cooley, Taxation (3d ed.) 7 — 10. As “the ]bower to tax involves the power to destroy,” so, in the absence of constitutional limitation, “the only security against the abuse of this power is found in the structure of the government itself,” since, “in imposing a tax, the legislature acts upon its constituents.” McCulloch v. Maryland, 4 Wheat. 316, 428; Pollock v. Farmers’ L. & T. Co. 158 U. S. 601, 15 Sup. Ct. 912. Whether the exactions from railway companies, mentioned, constituted taxes upon such *520property, ought to depend upon fixed standards which all are bound to recognize. Certainly, such standards are not to be found in the process of reasoning — sometimes permissible — of inclusion and exclusion. To assert that taxes levied upon property for the purpose of revenue by a particular method give to the owner the protection of the constitutional provision quoted, but that taxes levied upon the same or a portion of the same property, or other property, for the purpose of revenue by a different method, give to the owner no such protection, is to declare, in effect, that such constitutional provision gives no protection unless the legislature happens to prescribe such particular method. In other words, it makes the question of such protection to turn upon the choice of methods by the legislature, notwithstanding the taxes in either case are levied upon property for the purpose of revenue. Certainly a limitation which is thus optional, or to be applied only when convenient or desirable, is no limitation.
In determining the question above suggested, and in view of the language of the constitution quoted, it is unnecessary to consider here such exactions, by way of taxes in the general sense, as are not based upon nor measured by property or the income of property, whether they are made under the police power of the state in prescribing regulations affecting the lives, limbs, health, comfort, good order, morals, peace, and safety of society, or as exactions for special privileges or licenses granted. The exactions of moneys under the police power are generally for the purposes of regulating the relative rights, privileges, and duties between individuals, the conservation of order, the encouragement of industry, and the discouragement of pernicious employments. 2 Cooley, Taxation (3d ed.) 1125, 1126. The exactions of moneys under the taxing power are generally for the purposes of revenue. Id. Such distinction should be observed in con*521sidering the nature of the exactions in question from railroad companies. Where a railway runs through a state or a considerable portion thereof, its value includes not only its roadbed, depot grounds, rolling stock, and right of way, but its franchises and its corporate rights to operate the same; and hence its value for the purposes of taxation can be most satisfactorily ascertained by regarding the whole railway as a unit. 1 Oooley, Taxation (3d ed.) 693-700. This seems to be expressly held in Chicago & N. W. R. Co. v. State, post, p. 553, 108 N. W. 557. It is very obvious that it would be very difficult, if not impossible, to ascertain such value through town, city, and municipal agencies, since the small section of the railroad located in any town, city, or municipality, by itself, would be of little or no value, but as constituting a part of the whole line would be of great value. Yellow River Imp. Co. v. Wood Co. 81 Wis. 554, 560, 562, 51 N. W. 1004, and cases there cited. In the language of my brother Maeshall in the ad valorem case cited: “It is the logical basis of the numerous decisions holding it to be necessary to justice and uniformity of rule in taxing laws that the property of a railway corporation be assessed ■as a unit; the physical things being regarded as merged in that produced by union with the franchise element as the one of primary importance” — citing numerous cases in support of the statement.
Seemingly inspired by such necessity, the legislature of 1854 devised a system of assessing such railway property as a unit, and fixing the amount which each corporation was required to pay at a certain per centum of its gross earnings. Ch. 74, Laws of 1854. That chapter is entitled “An act taxing railroads and plank roads.” The first section of the act required every railroad or plank road company to make out and return to the state treasurer, on or before January 10th of each year, a true and just verified statement of its *522“gross earnings . . . for tbe preceding year up to tbe 1st day of January.” Tbe second section declared:
“It shall be tbe duty of tbe said railroad companies and plank road companies to pay or cause to be paid to tbe treasurer of tbe state for tbe use. of tbe state, on or before tbe lOtb day of January in each year, a sum equal to one per centum of the gross earnings of their respective roads so returned, which amount of tax shall tahe the place and he in full of all of tbe taxes of every name and kind upon said roads, or other property belonging to said companies, or tbe stock held by individuals therein, and it shall not be lawful to levy or assess thereupon any other or further assessment or tax for any purpose whatsoever.”
That was followed by a provision applicable when tbe road was partly in this state and partly in another. Secs. 3 and 4 of that chapter prescribed penalties for failure “to comply with tbe requirements” of tbe act. Sec. 5 of tbe act made it tbe duty of tbe treasurer of tbe state to '
“ascertain, as near as may be, tbe gross earnings of such delinquent company, and assess thereupon tbe said one per centum, and shall seize and lay upon tbe whole or any part of tbe property, rights, and franchises of said company, and after giving ten days’ public notice of tbe time and place of sale, shall proceed to sell at public auction tbe same, to satisfy tbe amount thereof, together with all costs and disbursements . . . incurred in making such assessments and sale thereof.”
That act went into effect April 10, 1854. It appears upon its face to have been for tbe sole purpose of raising and collecting public revenue “for tbe use of tbe state.” This is conceded in tbe opinion filed. There was nothing in tbe act regulating or attempting to regulate such roads in any way. It certainly was not a police regulation. It was purely a revenue measure, and hence, as indicated, a method of levying, assessing, and collecting taxes from such companies, “which amount of tax” was to “take tbe place and be in full of all of tbe taxes of every name and kind upon said roads;” *523and it was therein declared not to “be lawful to levy or assess thereupon any other or further assessment or tax for any purpose whatsoever.” Such prohibition against such levy or assessment thereupon of “any other or further assessment or tax” was in effect declaring that the exaction made by the act itself was the assessment and levy of taxes. Except as to a slight change as -to the time for making the return to the state treasurer, such statutes continued in force until 1860. Secs. 182 — 186, ch. 18, R. S. 1858; ch. 140, Laws of 1859.
Notwithstanding the plain language employed and the express purpose of the act, it is now said that ch. 74, Laws of 1854, did not impose a tax on railroad property, nor a tax at all, within the meaning of sec. 1, art. VIII, of the constitution ; and this seems to be put upon the ground that this court so held more than fifty 'years ago, and that such ruling was thereafter repeatedly sanctioned. The case referred to is known as the Wauhesha, Gase, and was decided by this court November 17, 1855. The action was by the railway company to restrain the local authorities from collecting taxes assessed in the ordinary way during the year 1854 upon the roadbed, depot grounds, and fixtures in the town of Eagle, on the ground that such property was expressly exempted by ch. 74, Laws of 1854. The defendants demurred to the bill, principally on the ground that the act was unconstitutional. In overruling the demurrer Judge Hubbell, before whom the cause was tried at the circuit, in his written opinion, after stating the substance of the act above quoted, uses this significant language:
“The defendants contend that under the law in question the rule of taxation is not uniform: (1) Because it establishes a rule of taxation for property belonging to companies mentioned, differing from the general rule applicable to the taxation of other property; it being a tax upon income, instead of a ratable tax upon vdlue. ' (2) Because it levies a state tax, and exempts from town, county, and district taxes. (3) Because it establishes a new mode of levying taxes, dif*524fering from the general rule. ... I am compelled to dissent from all the positions taken by the defendants.” 9 Wis. 434.
The plain meaning of this language is that the act in question was not in violation of the constitutional rule of uniformity by exacting “a tax upon income, instead of a ratable tax upon value,” nor because it “levies a state tax, and exempts from town, county, and district taxes,” nor “because it establishes a new mode of levying taxes differing from the general rule.” The whole scope of the opinion is to the effect that such “tax upon income” was not in violation of the constitutional rule of uniformity. Among other things he says, in effect, that the act “operates as a partial exemption from general taxation.” 9 Wis. 433-436. True, as stated in the opinion filed, he said: “I regard the payment to the state, not as a tax, but as a tonus or compensation for the exemptions granted.” But he said in the same connection that “the whole substance and effect of the law is to release those companies absolutely from all ordinary taxes for ordinary purposes, upon condition of an annual payment to the state.” He then answered the contention of the defendants, that the rule of uniformity was violated because “the amount of such tax” was “regulated by the amount of annual income,” instead of the “value” fixed by the “assessors,” by saying:
“But all railroad and plank road companies in the state are made subject to the same rule. It is doubtless a departure from the general law, and amounts to a declaration that- this class of property shall have a rule by itself. ... I have never found a judicial decision holding that, because one class of property paid one rate of duty and another class a different rate, the duties were not uniform. ... So long as each class of property in every part of the state and under like circumstances is subjected to the same rule, it is difficult to see how the principle of the constitution is violated; much less how the law is so grossly and palpably wrong as to warrant the interference of the courts, declaring it absolutely void. . . . Under every view which I have been able to take *525of this case, I cannot but regard the act of April 1, 1854 (whether its provisions be wise and equal, or otherwise), as within the constitutional power of the legislature, and therefore valid9 Wis. 435, 436.
I find no statement nor intimation in that opinion tending to support the proposition now advanced that the exactions prescribed by ch. 74, Laws of 1854, were not to be enforced as taxes levied upon property within the meaning of the constitutional provision quoted. That opinion was published in 3 Am. Law Reg. (May, 1855) 679-683. The syllabus recites the constitutional provision quoted and the substance of the act mentioned, and also the ruling of the court as follows:
• “Held, that this act was not unconstitutional, though the annual assessment on railroad companies was to be on income, instead of on property as in other cases, and though the companies were exempted thereby from town, county, and district taxes.”
Judge Hubbell was an able and learned lawyer and had previously been a member of this court under the old organization. The appeal from the order overruling the demurrer was argued for six days in this court in July, 1855; but the case was not decided until November 17, 1855, when, as appears from the record of this court, the “order of the court below overruling [the] demurrer to the bill [was] affirmed, with.costs.” The writing of the opinion in the case fell to the lot of Mr. Justice Smith, who was then the reporter of the court, and continued to be such reporter not only during the balance of his term, but for a year thereafter. Had the case been reported in its order it would have appeared in vol. 4 of Wisconsin Reports; but it was never reported until Justice Smith ceased to be a member of the court, and then only as a note to the Knowlton Gase, in 9 Wis. 431-449. But, no opinion of the court was ever prepared by Justice Smith, nor by any one, notwithstanding the fact that the papers in *526the case were apparently retained for that purpose until Eebruary 4, 1857, when they vyere transmitted to the trial court. 9 Wis. 428. Had an opinion been prepared by Justice Smith, as contemplated at the time the case was decided, yet it could not have been filed as the opinion of the court until concurred in by Chief Justice Wiiiton and Justice Cole, or one of them. Four years after that decision, and after Justice Smith ceased to be a member of the court, Justice Cole, in his dissenting opinion in the Knowlton Gase, said:
“Though no opinion has been prepared, yet the points decided were written out by one of the members of the court, and, as he informs me, placed upon file with the papers in the case. It appears that the paper containing these points has been misplaced, or cannot now be found. Still I supposed the ground of that decision was well understood throughout the state.” 9 Wis. 428.
Obviously Justice Cole did not know, until so informed by Justice Smith, that such paper had been “placed upon file with the papers in the case,” and there is no'evidence that Chief Justice Whiton ever knew such to be the fact. In reporting the case Justice Smith fails to state that such paper had been placed upon file. All he said in respect to that statement is this:
“The following paper contains all the opinion of the court which has been written, . . . and which has been discovered since the opinions in Knowlton v. Supervisors of Rock Co. were written.”
The omitted words relate wholly to the order of affirmance, which was so of record in this court and hence open to inspection.
In writing the opinion of this court in the Knowlton Case, Dixon, O. J., speaking of the Waukesha Case, 9 Wis. 431, said: “Upon examination of the records and files of the court in that case, we can find neither headnote nor opinion. As a matter of fact, we are told that none were ever written.” *5279 Wis. 424. Subsequently the same chief justice stated that the statement of points there published was obtained “from one of the attorneys in the” Waukesha Case and “inserted by the reporter.” 15 Wis. 467, 468. In Justice Dole’s dissenting opinion in that case he said, among other things:
“This court did not decide, as has been intimated, that the law of 1854 did not impose a tax in the just and proper sense of that term, but was a payment made to the state by the several corporations to which the law applied in the nature of a bonus or compensation for the exemption granted. . . . The division of property into real, personal, and mixed, we considered a mere arbitrary division, which the legislature might or might not regard in the imposition of taxes. The legislature might adopt other classifications of property, imposing the tax upon those various classifications or kinds of property, and the rule of uniformity would be preserved, so long as the same rule of taxation was laid upon the same kind or class of property throughout the state, or the local division for which the tax was raised. Eor instance, the legislature might prescribe that all the railroad and plank road property in the state should pay one per centum of the gross earnings of their respective roads in lieu of all other taxes, as was done by the act of 1854, and yet this law would be valid, because it applied to all of that kind of property in this state. It was a uniform rule upon that class of property within the requirements of the constitution.” 9 Wis. 428.
Bo one will question the integrity of Justice Cole, and no one would think of doubting the accuracy of his statements thus made, unless he supposed he had unmistakable evidence to the contrary. In my judgment the language of Justice Smith, in the paper mentioned, is to the same effect as the language of Justice Cole above quoted and the language of Judge Hubbell in deciding the case above quoted. Justice Smith’s paper declared:
“The imposition upon railroad property by the act of 1854 does not violate that provision of 'the constitution of Wisconsin which provides a uniform rule of taxation, provided like property pertaining to railroads, or all property of that class, *528is alilce taxed, or aliJce exempt, as it appears to be. . . . Tbe state baying exempted tbis class of property from any tax whatever (except the one per cent.), which it had tbe right to do, provided it exempted all property of tbe same class uniformly, cannot be permitted to repudiate its own act and demand a levy under tbe general law, from tbe operation of which it bad granted the exemption.” 9 Wis. 449.
The plain meaning of this language is that ch. 74, Laws of 1854, did not violate tbe rule of uniformity because it prescribed a different method of taxing railroad property from other property, since it “alike taxed or alike exempted” all property of that class, and that by the act in question tbe state bad tbe right to exempt from taxation all that class of property, except “a sum equal to one per centum of the gross earnings” of tbe respective roads, since tbe act exempted all property of the same class. In other words, it re-affirmed tbe ruling of <Tudge Hubbell in that case, to the effect that railroad property could be classified for tbe purposes of.taxation “so long as each class of property in every part of tbe state and under like circumstances is subjected to tbe same rule,” and hence that railroad property could be classified by itself without violating tbe rule of uniformity. That was intended to answer the contention of Mr. Ryan to the contrary under tbe second bead of bis brief. 9 Wis. 439 — 444.
Having thus solemnly held, in effect, that under tbe constitution tbe legislature had power to prescribe the property upon which taxes should be levied and to classify such property for tbe purposes of taxation, and to put all railway property into a class by itself, and to enforce payment of exac-tions made on account of tbe same in tbe manner prescribed, it is difficult to understand bow tbe same court in tbe same action could consistently hold that ch. 74, Laws of 1854, did not provide for imposing “a tax on railroad property, or a tax at all, within tbe meaning of sec. 1, art. VIII, of tbe constitution.” Certainly no such inconsistency should be attributed to tbe decision of November 17, 1855, unless tbe *529evidence is unquestionable. I find no such evidence in Justice Suite’s paper. The balance of that paper not quoted above reads as follows:
“If the act of 1854, having relation to this class of property, was not passed in a -constitutional manner, as it is claimed .appears by the records or journals of the legislature, so, by like evidence, it would seem that the law by which the board of supervisors attempted to assess this property was unconstitutionally passed; and, admitting the premises, the injunction is proper, the bill covering such a case. But the court do not think the law of 185U does impose .a tax within the meaning of the constitutional __provisions, and therefore the law of 1854 is valid, so far, at least, as the government is concerned.” 9 Wis. 449.
Manifestly, the first portion of this quotation has no reference to the rule of uniformity prescribed by sec. 1, art. VIII, of the constitution, but relates entirely to the1 first point made in the brief of Mr. Ryan, to the effect that ch. 74, Laws of 1854, was a “law which imposed a tax,” but was not passed by a yea and nay vote entered upon the journals of the legislature, as prescribed by sec. 8, art VIII, of the constitution. 9 Wis. 436-439. According to the paper the court assumed that if it so appeared “by the records or journals of the legislature,” as claimed by Mr. Ryan in support of his demurrer, then it also' appeared “by like evidence . . . that the law by which the board of supervisors attempted to assess this property was unconstitutionally passed,” and hence no justification to the defendants. The only possible ground for an inference in support of the prop-^ osition advanced is the use of the word “provisions” in the next clause of the quotation, or rather the use of the letter “s” at the end of that word, making it plural instead of singular. The language of that clause is significant. The word “but,” at the beginning, indicates a continuance of the answer to Mr. Ryan’s contention that the act mentioned was never passed by a yea and nay vote entered upon the jour*530nals, as required by sec. 8, art. VIII, of the constitution; and the words “üie law of 185k- does impose a tax” relate to what is said in that section, and not to anything said in sec. 1, ■art. VIII, of the constitution. That had been fully covered in the other portion of Justice Smith’s paper above quoted. Certainly, there is a broad distinction between a law imposing a tas and a statute prescribing a method of levying a tax upon property, or making an exaction in lieu of a tax •on .property.
In view of the language of that paper, and the facts stated, and what was said by Justice Cole, it is very clear to my mind that this court, in the case referred to, decided four propositions November W, 1855, to the effect: (1) Oh. Raws of 1854, did not impose a tax within the meaning of •sec. 8, art- VIII, of the constitution, which required the vote ther’eon to be taken by yeas and nays and entered on the journal. (2) If it did, it also appeared by like evidence that the statute under which a general assessment of this same property was assessed by the defendants was not passed by such yea and nay vote, and hence was no justification for the defendants. (3) Under sec. 1, art. VIII, of the constitution, the legislature had the power to prescribe the property upon which taxes should be levied, and to classify such property for the purposes of taxation, and to put all railway property in a class by itself, and to enforce payment of ex-actions made in the manner prescribed in the act mentioned. ■(4) That act did not violate the rule of uniformity by prescribing a different method and rate of taxing railroad property from other property, since the exaction in lieu of taxation and the exemption therein made apjilied alike to all that class of property throughout the state.
The question recurs whether such power to classify property for the purposes of taxation and to make exactions in lieu of taxation has since been permanently negatived by the decisions of this court. It must be admitted that November 9, *5311859, and. several months after Chief Jnstice Whitoh and ■Justice Smith had ceased to he members of this court, and against the judgment of Justice Cole, this court, in an opinion -written by Chief Justice Dixon, concurred in by Justice Paute, constituting a majority, brushed aside the decision of November 17, 1855, with the remarks that “upon examination” they found “neither headnoie nor opinion” among “the records and files of the court in that case,” and had been “told •that none were ever written,” and that “from the best information” they had obtained they had learned “that it was ■determined by Re court that no question of the exercise of the taxing power was involved in it.” Knowlton v. Rock Co. 9 Wis. 410, 424. In that case the opinion of the court (with Justice Cole dissenting) declared that sec. 1, art. VIII, of ■the constitution prohibited the legislature from classifying property for the purposes of taxation and then taxing one class at a different rate than another class. Among other things it is there said:
“ ‘The rule of taxation shall be uniformthat is to say, the course or mode of proceeding in levying or laying taxes shall be uniform. It shall in all cases be alike. The act of levying a tax on property consists of several distinct steps, such as the assessment or fixing of its valué, the establishing of the rate, etc.; and, in order to have the rule or course of proceeding uniform, er Ji step taken must be uniform. The valuation must be uniform, the rate must be uniform.” 9 Wis. 420, 421.
January 4, 1860, two cases were decided by this court in which that' case was approved so far as deemed applicable, both relating to special assessments, which were held to be an exercise of the taxing power and limited by sec. 1, art. VIII, of the constitution, as modified by sec. 3, art. XI, of the •constitution. Weeks v. Milwaukee, 10 Wis. 242, 270 (see p. 262); Lumsden v. Cross, 10 Wis. 282, 289 (see. p. 284)-In this last case it was expressly held that “all taxes levied for the purpose of revenue and for the support of the gov-*532eminent, as well for tbe expenses of municipal corporations as for tbe state at large, must be levied in accordance with tbe uniform rule prescribed by sec. 1, art. VIII, of tbe constitution.”
Tbe case of State ex rel. Att’y Gen. v. Winnebago L. & F. R. P. R. Co. 11 Wis. 35, came before tbis court on the return to tbe alternative writ of mandamus to compel tbe plank road company to pay to tbe treasurer of tbe state $105,000, being a sum equal to one per centum of its gross earnings for two years, and wbicb it bad failed and neglected to make return to tbe state treasurer and pay, as required by law. Ob. 14, Laws of 1854; secs. 182, 183, cb. 18, R. S. 1858. Tbe company moved to quash tbe writ on tbe sole ground tbat tbe statutes cited were in violation of tbe constitutional provision wbicb declares tbat “tbe rule of taxation shall be uniform, and taxes shall be levied upon sucb property as tbe legislature shall prescribe.” Sec. 1, art. VIII. Tbe ease presented for consideration tbe same questions involved in the case decided November 17, 1855. Both cases arose under the same statutes, the only difference being that the former action was brought by tbe railway company and the latter action was against the plank road company. The opinion of the majority of the court was written by Justice PaiNe, and, as bis opinions usually were, in language too plain to be misunderstood. After speaking of tbe uncertainty of the points decided in tbe Waukesha Ca, 9 Wis. 431, and tbat it was “common for all courts to review their own decisions,” be declared that, “in view of its peculiar circumstances,” be deemed it “eminently proper [for tbat case] to' be reconsidered.” He then said tbat if it was decided in tbat case “tbat tbe law taxing rail and plank road companies” was “a compliance with tbe constitutional requirement of a uniform rule, it was in tbis respect overruled by” tbe Knowlton Case. Then, after reconsidering and rediscussing the question, tbe majority of tbe court, adhering to tbe rule as stated in tbe Knowlton Case. *533beM tbat the legislature had no power to divide property into different classes, preserving equality in each class though fixing a different rate in the different classes, but that, on the ■contrary, the rule of taxation.must be general, and applicable to all taxable property alike, and that the rule of uniformity “was designed to secure equality in the burden as between the different kinds of taxable property.” 11 Wis. 35, 38 — 42. The opinion then states that “the only remaining question is whether the imposition upon the plank road company is a tax within the meaning of the constitution.” 11 Wis. 42. It then answers the several attempts of counsel to distinguish it from a tax, to the effect that, although assessment on valuation was the usual and general mode of imposing a tax, yet that it was not essential; that the “difference in the mode would not prevent its being a tax;” that there was “certainly no room for the pretense that this is [was] a bonus for the granting of the charter;” that there was no ground for claiming “that the bonus was a mere proposal or offer of a bargain or contract,” since “the tax was absolute and imperative, leaving nothing to the discretion of the taxpayer.” It is then saM, in effect, that the exaction cannot be maintained as a license, which is an “authority granted to do that which the licensee might not legally do without it.” The opinion continues:
“We have no idea that the provision of the constitution requiring the rule of taxation to be uniform was designed to, or does, impose any restriction on the police power of the legislature in granting licenses for anything that may in its nature be the subject matter of a license. But we do not think they could license the owners of a particular class of property to be exempt from the payment of full taxes on the payment •of a less sum. That would obviously be no exercise of the police power, but could only be resorted to as a mere evasion •of the constitutional rule of uniformity, and that is,the only kind of a license into which this act taxing rail or plank roads can by any possibility be construed. It is not a license to exercise the rights granted by their charters, for that right the charters themselves give, and this act does not profess to *534give. It grants only tbe right to be exempt from all other taxation on the payment of a specific tax of one per centum of their gross earnings. The legislature did not call this a license, but honestly called it a tax, as it is- beyond ail ques-tion11 Wis. 45.
Justice Cole dissented from the proposition that the legislature had no power to classify property for the purposes of taxation, and then to tax one class at a different rate than another; but he never dissented from the proposition that the exaction of a sum equal to one per centum of the gross earnings of rail and plank road companies was a tax within the meaning of the uniformity clause of the constitution. On the contrary, he always contended that it was a tax, and a valid tax, on all that class of property. So it appears that March 6, 1860, this court in that decision unanimously held that such exaction upon such gross receipts was a tax on the property of such companies, within the meaning of sec. 1, art. VIII, of the constitution — a proposition which does not seem to find favor at the present time.
Sixteen days after the announcement of that decision, and on March 22, 1860, the governor of this state approved of two bills which had just before passed the legislature. One was entitled “An act exempting certain property therein named from taxation,” and declared:
“The track, right of way, depot grounds, and buildings, machine shops, rolling stock, and all other property, necessarily used in operating any railroad in this state, belonging to any railroad company, are hereby, all and singular, declared to be, and they shall henceforth remain, exempt from taxation, for any purpose whatever, and it shall not be lawful to assess or impose taxes upon any property before named.” Ch. 173, Laws of 1860.
Such exemption was subject to a proviso as to special assessments and taxes on property not connected with such roads, and .excepting therefrom railroads operated by horse *535power. Tbe other was entitled “An act regulating railroads.’’ The first section declared:
“All railroad companies now organized, or that may hereafter be organized, in this state, and having a railroad completed, in whole, or in part, and being operated or used, shall hereafter be compelled to apply for, and obtain, in the manner hereinafter directed, a license for the operating of their respective roads, and to pay for such license, to the treasurer of the state, as a fee or charge therefor, a sum equal to one per centum of the gross earnings of their respective roads.” Ch. 174, Laws of 1860.
Secs. 2 and 4 fixed the tifue for making return to the state treasurer of the amount of such gross earnings, and applying for such license and paying for the same, substantially as prescribed in secs. 182, 183, ch. 18, E. S. 1858, as amended by ch. 140, Laws of 1859, omitting therefrom plank road companies. Sec. 3 prescribed a penalty and forfeiture for any failure to comply with the act, with a proviso. Sec. 5 repealed secs. 183, 186, ch. 18, E. S. 1858; and sec. 6 excepted from the act railroads operated by horse power.
These two acts were not only pending at the same time and approved by the governor on the same day, but they appear on their face to have one common purpose, as complements of each other. With some change of phraseology and omitting the provisions in respect to plank roads, they were, together, in substance the same as the prior statutes above considered (eh. 74, Laws of 1854; secs. 182 — 186, ch. 18, E. S. 1858). Horse railroads are expressly excepted from each, and neither applied to plank road companies. The one exempts from taxation such property of the railway companies as is used in operating the respective railroads for which the license is granted, leaving all lands owned by such companies, not adjoining the track, subject to all ordinary taxes. The sole purpose of the two acts together was to secure from the respective railroad companies, each year, “a sum equal *536to one per centum of the gross earnings of such road.” While the one was entitled “An act regulating railroads,” yet it contained no regulation nor attempt at regulation. The only object of the two enactments was to secure for the use of the state the revenue mentioned. The exaction of such percentage of the gross earnings of the property so exempted, though in form “as a fee or charge” to be paid “for a license for the operating of their respective roads,” was nevertheless essentially an annual tax on the respective companies for the amount stated, in consideration -of such exemptions. While that act was, undoubtedly, inspired by previous rulings of this court, yet it is true that sixteen days before that enactment Justice Paine, with Dixon, O. J., concurring, declared, in the language above more fully quoted, that such exaction by way of license issued under the circumstances mentioned “could only be resorted to as a mere evasion of the constitutional rule of uniformity.” 11 Wis. 45.
' The Kneeland Case was decided after that enactment, but was based upon facts existing prior to the enactment. It was brought to restrain the issuing of tax deeds on Kneeland’s property, which had been sold for taxes for the years 1858 — 59, on the ground that the assessors had knowingly and intentionally omitted to assess the property of railroad companies of the value of $500,000, The city justified such omission under ch. 74, Laws of 1854, and sec. 183, ch. 18, K. S. 1858, and the trial court held in favor of the city and dismissed the complaint, and Kneeland appealed to this court; and upon the first'hearing the judgment was reversed and the cause remanded with direction to enter judgment in favor of the plaintiff. 15 Wis. 454-466. In writing the opinion of this court, in reaching such conclusion, Justice Paine starts out with the statement that in the case of State ex rel. Att’y Gen. v. Winnebago L. & F. R. P. R. Co. 11 Wis. 35, “this court decided that the law which attempted to make railroads and plank roads taxable by a different rule from *537that applicable to the general mass of taxable property was unconstitutional.” This was said on the theory that the ex-actions made from such companies by the statutes just cited were necessarily taxes upon property within the meaning of sec. 1, art. VIII, of the constitution, and there is no intimation in that opinion that such exactions were not such taxes. 15 Wis. 458 — 466. The only hesitancy expressed in holding the act, so taxing railroads by a different rule than other property, to be invalid, was the fact that in the Waukesha Case, 9 Wis. 431, the same act had “been once declared valid by this court.” 15 Wis. 461. In view of that decision, and the fact that the departure therefrom had resulted in invalidating all the taxes in counties where railroad property was located, the court was urged to retrace its steps and “hold the law taxing railroads to have been constitutional.” 15 Wis. 462. But the court finally concluded “that the consequences of going backward’ might, “after all, be more disastrous than those of going forward.” The opinion then states the point at issue and the result of going backward in this unmistakable language:
“But, if we go backward, we must say that particular classes of property may be taxed at less rates than others, and that the legislature -may make whatever discrimination they please in the rates of taxation, provided only that each class is taxed alike.” 15 Wis. 463.
On a motion for a rehearing'being'made the same was granted, and opinions filed thereon by Dixon, C. J., and Justice Paine. 15 Wis. 467—474. The gravity of the situation sufficiently appears in those opinions. Among other things, Dixoet, C. J., said:
“The interests involved are immense, and the consequences of adhering to our late decision beyond calculation. The taxes for a series of years in a great state like this cannot be annulled, and every proceeding connected with and depending upon them overturned, without a shock which must be felt by every property owner and citizen of the state.” 15 Wis. *538468. “I do not see bow tbe errors of the past are to be corrected, except by the levy of a new tax to make np all former deficiencies. I have tried to persuade myself that a reassessment and relevy of the taxes for those years was practicable, bul I am satisfied it is not.” 15 Wis. 469. “It seems to me that, as to the particular species of property in question before the court in 1855, I must return to the rule then established.” 15 Wis. 469. “As I have before said, my mind is in great perplexity and doubt, but upon the whole I can see no other way than to go back.to the rule established by the court in 1855.” 15 Wis. 471.
The opinion of Justice PaiNe on that motion is equally significant. Among other things he said:
“I have become satisfied that, if we adhere to the decision already announced in this case, it will invalidate not only the taxes in those counties where there was rail and plank road property, but also the entire taxes of the state; for the omission of that property in the counties where it was located necessarily disturbs the proportions as between them and the other counties in the state equalization. Another case has also been argued, in which it was claimed that the principles of our decision must also invalidate the laws of 1860, professing to exempt railroads entirely, and then requiring them to pay a license. It is said that this is in substance the same thing as the law of 1854 under another name. And I am satisfied also that this is so-. We cannot, while adhering to our 1860, unless we are prepared to say that the legislature may decision in the” Plank Road Case, “sustain this legislation of do that indirectly which it cannot do directly; that it may, by merely calling things by wrong names, sustain the most palpable evasion of a constitutional provision.” 15 Wis. 4J2.
Then, after reiterating his conviction “that a rule taxing different kinds of property at different rates is not a uniform rule,” he declared it to be his “duty to return to and follow, though” he could not defend, the Waukesha Case, 9 Wis. 431; that, notwithstanding the uncertainty as to the decision in that case, it was known “that upon some ground” the court “sustained the law of 1854,” and “that all the taxation of the state and all the private transactions growing out of it” *539bad “since been conducted on tbe theory of its validity,” and hence that that decision should be regarded as imperative authority and the decision in the Plank Road Case, 11 Wis. 35, overruled. 15 Wis. 473, 474. After the ease had been re-argued Justice PaiNe wrote another opinion on behalf of’ the court, and in doing so stated that ordinarily he would content himself “without adding anything to the opinions” he-had “already filed in the case,” but in view of the fact that “the positive conviction, stated in granting” the rehearing,, that it was the duty of the court to retrace its steps and follow the Waukesha Case, had “been assailed by eminent counsel,” he briefly stated the reasons for adhering to such convictions. 15 Wis. 692. The opinion then discusses at some length the-maxim stare decisis on the assumption “that there was a decision of this court sustaining the validity of the law of 1854 taxing rail and planic roads.” 15 Wis. 692, 695. The opinion then answered the contention that no such assumption could be indulged, “based entirely upon the fact that no written opinion was filed in the Waukesha Case as the statute required.” The opinion then states that Justices Smith and Cole
“both agree that the court decided that the act of 1854 was not a violation of the constitution. We get this from a written statement of the points decided, made soon after the decision, by the judge then acting as reporter, and to whom the duty was assigned of writing the opinion, which statement was sent to one of the counsel in the case for his information; and from the statements of Mr. Justice Cole, now on the bench. . . . The only discrepancy is that the statement of Justice Smith shows that the court did not think that the law of 1854 imposed ‘a tax within the meaning of the constitutional provisions,’ while Justice Cole states that they did ‘not decide that it did not impose a tax,’ etc. But the difference is wholly immaterial, inasmuch as both statements show the court held that, even if it was a tax, it was no violation of the rule of uniformity. Both show that the law was decided to be no violation of the constitution.” 15 Wis. 695.
*540Dixon, C. J., Rad already stated “that no opinion or statement of the points decided . . . was ever placed upon the files of this court,” hut that such statement “was afterwards •obtained . . . from one of the attorneys in the former case and inserted by the reporter.” 15 Wis. 467.
Obviously, neither Dixon, O. J., nor Justice Paine had much faith in the claim based upon the word “provisions,” contained in one clause of the statement, to the effect that the act of 1854 did not impose a tax on property, within the meaning of the uniformity clause of the constitution, especially against the. statement of Justice Cole, above quoted, that no such decision was made. This is manifest from the fact that each of the several opinions of Judges Dixon and Paine, mentioned, was made to turn upon the power of the legislature to classify property for the purposes of taxation and then to tax each class at a different rate; Thus, Justice Paine in the Kneeland Case said in behalf of the court:
“But, if we go backward, we must say that particular ■classes of property may he taxed at less rates than others, and that the legislature may make whatever discrimination they please in the rates of taxation, provided only that each class is taxed alike.” 15 Wis. 463.
Since the court did “go backward” and affirm the judgment, instead of reversing it, the court necessarily sanctioned the legislative power of classification and discrimination so far as taxing rail or plank roads was concerned. Certainly •Justice Paine did not intend to go back to an assertion of Justice Smith which he deemed “wholly immaterial.” That is made plain in another case in the same volume^ where this •court refused to overrule the Knowlton Gase, but expressed itself as being bound by the decision in the Waukesha, Oase, and then declared: “But we shall follow that decision no further than the exact point decided; that is, to sustain the validity of the act of 1854 taxing rail or planlc roads.” Knowlton v. Rock Co. 15 Wis. 600, 601.
*541The ruling in the Kneeland Gase “as to the constitutionality of the law taxing railroad companies a per cent, upon their gross earnings” was affirmed in Dean v. Gleason, 16 Wis. 1. The history of such adjudications was partially stated in Wis. Cent. R. Co. v. Taylor Co. 52 Wis. 37, 64—77. As stated by Justice PaiNE in the Kneeland Gase, “the laws-of 18*60” (chs. 173, 174, Laws of 1860) “professing to exempt railroads entirely, and then requiring them to pay a license,” were “in substance the same thing as the law of 1854 under another name.” As already indicated, those two chapters together constituted a single plan or scheme for taxing railroads. With some slight changes, increasing the percentage and otherwise, they were continued in the Revisions of 1878 and 1898, and down to the ad valorem enactment. This is, in effect, conceded in the opinion filed. Time, the-substance of ch. 173, Laws of 1860, was placed in the section exempting property from taxation (subd. 14, sec. 1038, R. S. 1878, and Stats. 1898); and the substances of ch. 174, Laws of 1860, exacting a percentage on gross earnings, were placed in the chapter on the “Taxation of Railroads” (secs. 1211— 1214, R. S. 1878, and Stats. 1898). But, nevertheless, the two chapters are still to be regarded as together constituting the same scheme or plan for taxing railroads. They were complements of each other, and no legislature would grant the exemption without some exaction. Thus it was held by this court, in an opinion written by DixoN, O. J., that “the payment oí this sum into the state treasury, and which is called license money, must, in the light of past legislation upon the subject, be regarded as, in the judgment of the legislature, an equivalent for the taxes which those companies would otherwise be required to pay, if assessed and taxed according to the ordinary method prescribed by law.” Milwaukee & St. P. R. Co. v. Crawford Co. 29 Wis. 116, 123, 124; Milwaukee & St. P. R. Co. v. Milwaukee, 34 Wis. 271, 277, 278. In this last case it was held that “the statute is to be fairly and *542liberally construed in favor of the railroad companies, which do not receive such exemptions as a bonus, but are required to pay into the state treasury an equivalent for taxes in the shape of a license.” In a later case, construing the sections of the Statutes last cited, it was held that “statutes imposing license fees, which are to all intents and purposes taxes, should -be governed by the same rules of construction as those imposing taxes so nomine.” State ex rel. Abbot v. McFetridge, 64 Wis. 130, 140, 24 N. W. 140. The court there said: The statutes “impose involuntary burdens for revenue purposes upon -those who operate railroads. These impositions are called license fees, but in their objects and effects they are in the nature of taxes. Manifestly, the same rules which prevail in the construction of statutes imposing taxes eo nomine should be applied to statutes imposing such license fees.”
In view of the adjudications of this court above cited, I would not feel at liberty to hold that the legislature had no power to place railroad property in a class by itself for the purposes of taxation and to tax the same at a different rate and by a different method than other property, even were I to concede, as an original proposition, the correctness of the ruling in the Knowlton Case and the Flank Food Case— much less to hold that a tax upon the gross earnings of railway companies was not a tax on property within the meaning of the uniformity clause of the constitution. But I do not concede such rulings to have been correct. In an opinion written more than a quarter of a century ago, concurred in by Chief Justice Cole and Justices Lyoet and Tayloe, the writer pointed out the fact that the uniformity clause of our -constitution did not contain the word “equal” or “value,” or the equivalent of either of those words, like other constitutions cited. Wis. Cent. R. Co. v. Taylor Co. 52 Wis. 37, 60-88, 8 N. W. 821; Bacon v. Board of State Tax Comm’rs, 126 Mich. 22, 85 N. W. 307, 60 L. R. A. 361, 363, note. And •so the conclusion was there reached that, in the absence of *543such restrictive words in that clause of our constitution, the words “the rule of taxation shall be uniform” should not be •construed as including the word “equality” or “value,” or the equivalent of either. And so it was there said that that clause in our constitution
“simply requires that 'the rule -of taxation shall be uniform.’ But who makes the rule which is thus to be uniform ? Was it made by the constitutional convention, or was it left for the legislature ? Most of the constitutions referred to, where the word 'uniform’ has been used, have directly or indirectly applied it to property named therein, or valuation, or rate, or taxes, or classes of subjects; but in our constitution it applies to none of those things, but simply to the ‘'rule of taxation.’ What is this rule of taxation? Manifestly, it is the act of levying a tax, or imposing taxes, on the subjects of the state by the legislative power of the state. It is the measure of in•dividual duty in support of the public burdens, and the means •of enforcing the same. The rule of taxation is the law of taxation. Such rule or law must be prescribed by the legislature, as well as the property to which it is to be made applicable. But the uniformity does not go directly to the property so prescribed, but only to the 'rule’ or law by which contributions are enforced against the owners of such property. The uniformity reaches the property so designated by the legislature, but only through the 'rule’ or law prescribed. As the uniformity could through the rule or law only reach such property as the legislature should designate as being subject to taxation, it is very evident that it never could reach property not so designated, and therefóre exempt from taxation, and hence to which the rule could not apply. The legislature has the exclusive power to designate the property which shall be subject to taxation, and to prescribe a rule or law by which the owners of such property are forced to contribute to the public burdens, limited only by the requirement that the rule so prescribed shall be uniform. Uniformity of rule is entirely different from uniformity of subjects to which the rule is applicable. Most general laws are uniform rules, but the diversities in the subjects to which they apply are innumerable. In determining just what the rule of uniformity shall be in taxation, and how it shall be applied, there is a wide *544field for legislative discretion. Of course, it could be applied to rate or valuation, or mode or manner of assessment or collection, or all exemptions might be repealed or greatly-modified; and so it could be applied to all property, or to certain subjects, or to certain classes, kinds, or species of property. The denial of the power of the legislature to determine and fix The rule of taxation,’ subject to the limitation of uniformity, and tbe attempt to engraft it upon the constitution itself, as had been done by apt words in other constitutions, has led to much diversity of opinion, if not confusion of terms.”. 52 Wis. 93, 94.
This certainly was in conflict with the conclusion reached in the Knowlton Case and the Plank Road Case, where, although it was conceded to apply to the “course or mode of proceeding in levying or laying taxes,” yet it was also said that such
“course or mode of proceeding . . . shall in all cases be alike. The act of laying a tax on property consists of several distinct steps, such as the assessment or fixing of its value, the establishing of the rate, etc.; and, in order to have the rule or course of proceeding uniform, each step taken must be uniform. The valuation must be uniform. The rate must be uniform. Thus uniformity in such a proceeding becomes equality; and there can be no uniform rule which is not at the same time an equal rule, operating alike upon all the taxable property throughout the territorial limits of the state, municipality, or local subdivision of the government, within and for which the tax is to be raised.” 9 Wis. 420, 421.
If the construction thus given to the clause of the constitution in question is now to prevail, if “the course or mode of proceeding in levying and laying taxes” must “in all cases be alike,” if the “several distinct steps” in such proceedings “must be uniform,” then I am unable to perceive upon what principle the validity of ch. 315, Laws of 1903, can be sustained, since it provides only “for the taxation of railroad companies,” with a different method of assessment and a different method of valuation and fixing the rate than of other *545property, and other differences unnecessary to mention. But, as'I.read tbe decisions of this court, such construction so announced in tbe Knowlton Gase and sanctioned in tbe Planh Road Gase was expressly departed from in tbe final adjudication in tbe Kheelmd Gaseand subsequently. Thus it was beld long ago tbat “tbe mode of levying, assessing, and collecting taxes is entirely subject to tbe discretion of tbe legislature, limited by tbe constitutional provision wbicb requires tbe rule of taxation to be uniform.’’ Smith v. Cleveland, 17 Wis. 556, 565. Chief Justice Dixow, speaking for tbe court, there said:
“Tbe machinery of taxation, tbe mode of levying, assessing, and collecting, is subject entirely to its discretion. Tbe liability to taxation and nonpayment of tbe taxes being admitted, tbe legislature may, as to all other things, declare what shall or shall not be essential to tbe validity of tbe pro: ceedings. Tbe same power which imposes a duty may dispense with its performance.”
So tbe court beld, in an opinion by tbe same chief justice, tbat “tbe legislature has power to prescribe tbe forms of tax proceedings, and in matters of form may declare what steps shall or shall not be essential to tbe validity of a tax sale or tax deed.” Smith v. Smith, 19 Wis. 615. But it is unnecessary to further cite authorities on tbat question, since it is expressly beld in tbe ad valorem case decided herewith tbat it “is within tbe legislative discretion to' place railway corporations in a class by themselves,” as is "done by tbe act in question. Not only tbat, but it is there expressly beld tbat “tbe classification of mortgage indebtedness is legitimate under tbe doctrine of classification” therein stated. So it is beld in tbat case tbat “tbe legislature may classify and subclassify property, to tbe extent of distinguishing differences as to a particular class or subclass, reasonably requiring special treatment to promote tbe constitutional requirement.’’ Tbe placing of railroad corporations- in a class by themselves for tbe *546purposes of taxation, was just as legitimate under tbe license system as under tbe ad valorem system. See Chicago & N. W. R. Co. v. State, post, p. 553, 108 N. W. 557.
I am unable to perceive any logical basis for tbe proposition now advanced that tbe exactions made by law of “four per centum,” or any other “per centum, of tbe gross earnings of all railroads,” were not taxes upon property witbin tbe meaning of sec. 1, art. VIII, of tbe constitution. There can be no question but that such earnings were property. This court has recently held that notes and mortgages — “things in action and evidences of debt” — were “property” witbin tbe meaning of that clause of tbe constitution, and hence were subject to taxation under that clause. Kingsley v. Merrill, 122 Wis. 185, 190, 194, 99 N. W. 1044. Since tbe gross earnings of every railroad must necessarily be property belonging to such corporation, tbe only remaining question for consideration is whether the exactions so made in lieu or consideration of such exemption from ordinary taxation were “taxes, . . . levied upon such property” witbin tbe meaning of that clause of tbe constitution. In determining that question it is immaterial whether there was a contractual relation between tbe state and tbe railroad companies or not. It is conceded in tbe opinion filed that they were “taxes in tbe just and proper sense of tbe term,” for tbe purposes of revenue; but it is said that they were not “taxes on property witbin the meaning of tbe constitution.” Since such exac-tions of tbe percentage of such gross earnings were “taxes in tbe just and proper sense of tbe term,” it is difficult to conceive why they were not taxes on property witbin tbe meaning of tbe constitution. Certainly no marked distinction has heretofore been pointed out. Such distinction cannot be satisfactorily made upon tbe theory 'of inclusion and exclusion. Tbe necessity for having some fixed standard to determine such differences seems to have been realized, and so in tbe ad valorem case, herewith decided, and above cited (post, *547p. 553), it is, as I -understand, in effect beld that “the rule of uniformity” prescribed by the constitution only applies to '“direct taxation on property,” and. that as to such property 'the “legislature may classify and subclassify property.” The ■difficulty about such conclusion is that the constitution does not so read. It simply declares that “taxes shall be levied upon such property as the legislature shall prescribe” by a uniform rule. The language is sweeping and is broad enough to cover all “taxes in the just and proper sense of the term.” It is not confined to “direct taxation” nor direct taxes. Even if it were, the proposition advanced could not, in my judgment, be maintained, for the simple reason that a tax upon the “gross earnings” of a railroad company is just as much a direct tax on that portion of the company’s property as though it had been upon the roadbed, or rolling stock, or any personal property. Since a tax on “things in action and evidences of debt” has been held to be a tax on property within the meaning of the constitution (Kingsley v. Merrill, 122 Wis. 185, 99 N. W. 1044), it would seem to follow that a tax on gross earnings of railroad companies is a tax on property within the meaning of the same clause of the constitution. This must be so, unless such “gross earnings” are not to be regarded as property, since the mode of making such exactions for the purposes of revenue is purely a matter of legislative -discretion.
But we are not without direct authority on the question. Under the constitution of the United States “direct taxes” are required to “be apportioned among the several states, .. . . according to their respective numbers,” or inhabitants. Sec. 2, art. I, Const, of U. S. But indirect taxes, such as “duties, imposts, and excises,” are required to “be uniform throughout the United States.” Sec. 8, art. I, Const, of U. S. Under such provisions it was always conceded that taxes on land were “direct taxes.” After elaborate arguments • and careful deliberation it was held, under such constitu*548tional provisions, by the supreme court of the United States, that “a tax on the rents or income of real estate” was a “direct tax,” and, not having been so apportioned, was void. Pollock v. Farmers’ L. & T. Co. 157 U. S. 429, 15 Sup. Ct. 673. Such rulings were affirmed on re-argument. 158 U. S. 601, 15 Sup. Ct. 912. The court in the same case then decided that “taxes on personal property or the income of personal property” were “direct taxes.” Id. In a later case the same court held that “a stamp tax on a foreign bill of lading is, in substance and effect, equivalent to a tax on the articles included in that bill of lading, and therefore is a tax or duty on exports.” Fairbank v. U. S. 181 U. S. 283, 21 Sup. Ct. 648. Since taxes on the income of real and personal property are direct taxes on property, there would seem to be no escape from the conclusion that taxes on the income of railway companies, consisting of gross earnings, are also direct taxes.
It is sought to bring the case within the rule applicable to “duties, imposts, and excises,” or mere privileges, and so cases are cited where foreign insurance companies or other foreign corporations have been licensed to do business in the state. Numerous decisions of that kind have been made by that court, and no one disputes the proposition. The case apparently most relied upon is Maine v. Grand Trunk R. Co. 142 U. S. 217, 12 Sup. Ct. 121. The defendant was a corporation created under the laws of Canada, having its principal place of business at Montreal. The action was brought by the state to recover “an excise tax upon the defendant . . . for the privilege of exercising its franchises within the state,” under a statute which declared:
“Sec. 1. The buildings of every railroad corporation or association whether within or without the located right of way, and its lands and fixtures outside of its located right of way, shall be subject to taxation by the several cities and towns in which such buildings, land and fixtures may be situated, as other property is taxed therein.
“Sea 2. Every corporation, person or association, operat*549ing any railroad in tbis state, shall pay to tbe state treasurer, for tbe use of tbe state, an annual excise tax for tbe privilege ■of exercising its franchises in tbis state, wbicb, with the tax provided for in section one, shall be in lieu of all taxes upon such railroad, its property and stock.”
It will be observed that such "excise tax'” was in addition to tbe taxes upon tbe property of the corporation in tbe towns ■and cities where it was located. Tbe question for determination was whether such state statute was a regulation of interstate and foreign commerce. Tbe trial court held that it was, and adjudged accordingly. That judgment was reversed on tbe ground that such statute was not a regulation of such commerce, but, in tbe language of tbe act, “an annual excise tax.” Mr. Justice Fieiu>, speaking for tbe court, distinguished that case from an earlier case where^ tbe tax was “in terms upon tbe gross receipts of” tbe corporation. Phila. & S. S. Co. v. Pennsylvania, 122 U. S. 326, 7 Sup. Ct. 1118. Justices Bbadley, HablaN, Lamae, and Beoww dissented on tbe ground that tbe act was a regulation of interstate commerce. It bad long before been well settled by that court that tbe right of such Canada corporation to do business in the state of Maine depended solely upon tbe will of that state. Hooper v. California, 155 U. S. 648, 652, 15 Sup. Ct. 207, and numerous cases there cited. In tbis last volume that same court held that, without infringing tbe interstate commerce clause of tbe federal constitution, a state might impose taxes upon foreign corporations engaged in such commerce, “graduated according to tbe amount and value of tbe ■companies’ property measured by miles, and being in lieu of ■taxes directly levied on tbe property,” and that tbe same was ■“a tax wbicb” was “within tbe power of tbe state to impose.” Postal Tel. C. Co. v. Adams, 155 U. S. 688, 696-698, 15 Sup. Ct. 268. It was there said by tbe court that “doubtless no state could add to tbe taxation of property according to tbe rule of ordinary property taxation, tbe burden of a license or *550other tax on the privilege of using, constructing, or operating an instrumentality of interstate or international commerce or for the carrying on of such commerce; but the value of property results from the use to which it is put and varies with the profitableness of that use, and by whatever name the' exaction may be called, if it amounts to no more than the ordinary tax upon property or a just equivalent therefor, ascertained by reference thereto, it is not open to attack as-inconsistent with the constitution.” See, also, Atlantic & P. Tel. Co. v. Philadelphia, 190 U. S. 165, 23 Sup. Ct. 811. In a later case in that court, where the facts were similar to the case at bar, the local statute required the railway company to pay a “percentage on gross earnings as provided for therein,” in lieu of all other taxes; and the question was whether such statute was a regulation of interstate and foreign commerce, and it was held to be taxation of the lands of the company, through the payment of such percentage, and it was said in the unanimous opinion of the court:
“But there is great force in the claim that the act is not subject to the objections mentioned in” Fargo v. Michigan, 121 U. S. 230, 244, 7 Sup. Ct. 857; Philadelphia & S. S. Co. v. Pennsylvania, 122 U. S. 326, 7 Sup. Ct. 1118, “and the-cases therein referred to. In those cases there was a distinct tax upon the gross earnings without reference to any other tax, and not in substitution or in lieu of another tax, while in this case the act plainly substitutes a different method of taxation upon the property of a railroad company. It is a tax upon the lands and all the other property of the company, but instead of placing a valuation upon the lands and other-property, and apportioning a certain amount upon such valuation directly, as was the old method, a new one is established of talcing a percentage upon the gross earnings as a fair substitute for the former taxes upon all the lands and property of the company, and when it is said, as it is in this act, that the tax collected by this method shall be in lieu of all other taxes whatever, it would seem that it might be claimed with .great plausibility that a tax levied under such circumstances and by such methods was not in reality a tax upon the gross-*551earnings, but was a tax upon the lands and other property of the company, and that the method adopted of arriving at the sum which the company should pay as taxes upon its property was by taking a percentage of its gross earnings.” McHenry v. Alford, 168 U. S. 651, 670, 671, 18 Sup. Ct. 242. See Mich. Cent. R. Co. v. Powers, 201 U. S. 245, 26 Sup. Ct. 459.
But it is unnecessary to multiply authorities. As indicated, the license system of taxing railways, so called, which was in force in this state during the fifty years immediafely preceding the present ad valorem system, included the exemption from taxation of “the track, right of way, depot grounds and buildings, machine shops, rolling stock, and all other property necessarily used in operating any railroad in this state, belonging to any railroad company/’ and the exaction, in lieu and consideration thereof, of a “per centum of the gross earnings” of all such railroads. Subd. 14, sec. 1038, R. S. 1878, and Stats. 1898, and secs. 1211-1214 of the same Statutes. No one would claim that any legislature would grant such exemption as an .'independent proposition, nor without exacting payment, for the. purposes of revenue, of an amount supposed to be equal to what would have been the taxes upon the property so exempted had the same been assessed in the ordinary way. This is apparent from the absence of such exemption in the ad valorem system (subd. 3, see. 2, ch. 315, Laws of 1903), and its presence in the license system. The license system, so called, was manifestly resorted to by reason of the seeming necessity of taxing the property of each railway company as a unit and the difficulty of so taxing such property, as experienced in the ad valorem case decided herewith (post, p. 553).-
I am willing to subscribe to the proposition that in enacting ch. 315, Laws of 1903, providing for the “taxation of railroad companies” by the ad valorem method, the legislature was under the limitations imposed by the uniformity clause of the constitution; but I am unwilling to subscribe to the *552proposition, now advanced, that in exacting the corresponding millions of money annually from the same companies under the license system, which so prevailed prior to that enactment, the legislature was under no limitation by reason of the uniformity clause of the constitution. The purpose of each of the two methods was to secure a corresponding amount of revenue for the use of the state. To hold that the enactment of the one method was subject to such constitutional limitation and that the enactment of the other was not is to hold that the legislature by the choice of methods may determine whether such constitutional restriction shall or shall not be operative. To so hold, in my judgment, is to place form above substance, and to deprive citizens and taxpayers of the protection heretofore supposed to have been secured by such constitutional restriction. If the legislature may rightfully exercise such unlimited power to make exactions from the income of railway companies, then I do not perceive why the legislature may not exercise unlimited power in making similar exactions from the income of other property by a similar method. Can it be that the legislature can exempt from taxation all property producing an income, and then in lieu of such exemption exercise unlimited power in exacting a-percentage of such income through the so-called license system?
This opinion is written in no spirit of controversy, but merely to relieve myself from responsibilities which otherwise I would necessarily share, not only in the decision of this case, but also in the decision of the case of Chicago & N. W. R. Co. v. State, post, p. 553, 108 N. W. 557, and Nunnemacher v. State, 129 Wis. -, both of which axe decided herewith.