Court Opinion

ID: 6511792
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:23:02.767828+00
Date Added: 2024-06-11T15:54:54.205916
License: Public Domain

BRICKELL, C. J.
— The questions argued by counsel areas follows: 1. What is the nature and character of the fifth section of the act of the General Assembly, approved February 23d, 1860, incorporating the “Mobile & Spring ITill Railroad Company?” is it a contract by which the State stipulated that no other than the taxation prescribed shall be -imposed for municipal purposes by the authority of the State? or is it a privilege, or bounty, or exemption, conferred in mere generosity, or to"serve a temporary policy, or temporary purposes, which may be withdrawn at the discretion of the legislative power? 2. If it is a contract, is it now obligatory, the municipal corporation known as the “ City of Mobile,” to which the contract refers, having been dissolved by legislative enactment, and a corporation created, purely municipal, under the name and style of the “ Port of Mobile,” having substantially the same corporators and the same territorial boundaries ?
It may be remarked, that when the act of incorporation became a law, there was no constitutional limitation upon the power of the General Assembly, in the imposition of taxes, to make discriminations or exemptions, relieving the property of individuals or of corporations from the proportion of public burdens to which other property was subject. In this respect, the power of the General Assembly was unlimited, and controlled only by its own considerations of public utility. — Daughdrill v. Ala. Life Ins. & Trust Co., 31 Ala. 91; Mayor v. Stonewall Ins. Co., 53 Ala. 570. Private corporations were generally created by special enactment, and there was no general law, or constitutional provision, to which this special enactment was subordinate, subjecting it to amendment, alteration, or repeal, at- the will of the legislature.
A long line of judicial decisions, State and Federal, has settled the doctrine, stated fully and accurately by Mr. Justice Clifford, in Miller v. State, 15 Wall. 488, that “corporate franchises, granted to private corporations^ if duly accepted by the corporators, partake of the nature of legal estates; and the *571grant, under such circumstances, if it be absolute in its terms, and without any condition or reservation importing a different intent, becomes a contract within the protection of that clause of the constitution which ordains that no State shall pass any law impairing the obligation of contracts. Charters of private corporations are regarded as executed contracts between the State and the corporators; and' the rule is well settled, that the legislature, if the charter does not contain any reservation, or other provision, modifying or limiting the nature of the contract, can not repeal, impair or alter such a charter', against the consent, or without the default of the corporation, judicially ascertained and declared. Subsequent legislation, altering or modifying such a charter, when there is no such reservation, is plainly unauthorized, if it is prejudicial to the rights of the corporators, and was passed without their assent.” The power to alter, amend, or repeal, may be reserved in the act of incorporation ; and if so reserved, it qualifies the grant, and the subsequent'exercise of the power reserved does not offend the constitutional inhibition of laws impairing the obligation of contracts. Or, if, as is now generally true, by constitutional provision, or by a general law applicable to all acts of incorporation, the State reserves to itself the power to alter, amend, modify, or repeal such acts, there is a qualification of the grant, rendering it subordinate to legislative power to the extent of the reservation.
This doctrine, that the charter of a private corporation granted by the State'is a contract between the State and the corporators, inviolable by subsequent legislation, has been of móst frequent application, probably, when into the charter is introduced an exemption of the corporation from taxation, or a substitution of a species or mode of taxation intended to be less onerous than' that to which individuals.are subject, withdrawing the corporation and its affairs, to the extent of the exemption or substitution, from legislative control. When the benefit of such an exemption is claimed, the courts, upon high considerations of public policy, have not sustained it, unless it was conferred in terms clear and unambiguous. If there is just and reasonable doubt whether there is a legislative intent to relinquish the power to tax, wholly or partially, the doubt is solved in favor of the State, and not in favor of the corporation. — Cooley on Taxation, 146; Providence Bank v. Billings, 4 Peters, 514; Wilmington Road v. Reid, 13 Wall. 264; City Council v. Shoemaker, 51 Ala. 114. But, if the intent to relinquish the power is expressed clearly and unambiguously, and the relinquishment is to be taken and deemed as a contract between the State and the corporators, it-is the duty of courts to-*572give effect to it, as if it were a contract between private persons, touching their own private interests.
The provision of the act of incorporation now under consideration is in these words: “ That the corporate authorities of •the city of Mobile be, and they are hereby, empowered to impose an annual tax of one dollar on every hundred dollars of the gross earnings of said company, to be collected by the tax-collector of said city, whose duty it shall be to demand quarter-yearly of the president, secretary, or other financial officer of said company, statements under oath of the gross earnings of such railway,' and at the same time to collect the tax then due thereon; and said tax shall be in full and in lieu of all taxation by said city on such railway, its rolling-stock, equipments and appendages,” &c. The clause of the act immediately preceding this provision declares: “ The property of the company, and capital actually paid in, shall at all times be liable to the same rates of taxation as the property Of individuals of Alabama, and county and city of Mobile, and shall be taxed in no other way.” The words of the statute are clear and unambiguous ; the legislative intent expressed by them is not in the least uncertain or doubtful. The property of the company, .and the capital actually paid in, are subjected to the same tax.ation, State and county, and no other, than that which is imposed on the property of individuals. There is a legislative guaranty, that in the imposition of State and county taxes there will be no discrimination against the corporation — that upon it •no other than the just proportion of public burdens will be laid; that in this respect it shall stand upon an equality with ■natural persons. As to municipal taxation, or taxation by tlie •corporate authorities of the city of Mobile, a mode and rate of taxation, with the manner of its collection, is prescribed; and this is declared to be “in full and in lieu of all taxation by said city on such railway, its rolling-stock, equipments and appendages.” There could not have been employed words more clearly ■indicating the legislative intent to subject the railway of the •corporation, its rolling-stock and appendages, to the mode and ■rate of taxation prescribed, excluding all other municipal taxation.
The purpose of conferring upon the appellant corporate existence and corporate franchises and privileges, was to enable it to construct a railway for the transportation of property and persons. This purpose was so far a public use, that to the corporation was delegated the sovereign power of eminent domain, — the power of taking private property for public uses upon making just compensation. It was, doubtless, in consideration of the purposes for which the corporation was created, purposes not often capable of being accomplished by individual *573effort, or individual ability, and because every government finds it the better policy .to lend all reasonable encouragement to the accomplishment of such purposes, that the legislature deemed it wise to afford the corporation a guaranty against unfavorable-discrimination in the imposition upon it of State or county taxation, and to fix with certainty the municipal taxation to which it should be subject, relieving it from all other than that which is fixed and prescribed. The guaranty is as essentially a contract, as is any franchise or privilege granted to the corporation. If- it be not — if the corporation is subjected to-changing legislation; to discrimination against it in the imposition of State and county taxation, or to municipal taxation varying at the legislative will, — the corporate -franchises and privileges, which are matter of contract beyond all dispute, are diminished in value. Public benefit is the object of every grant of corporate privileges; and it is the benefit derived from the corporation, which, in the case of a private corporation, converts the grant into an executed contract, when accepted by the corporators, inviolable by subsequent legislation. — Ang. & Ames Corp. § 13; Daughdrill v. Ala. Life Lns. & Trust Co., 31 Ala. 91; Home of the Friendless v. Rouse, 8 Wall. 430.
There are donations or gratuities to individuals, and exemptions or privilegeá conferred upon corporations, proceeding from motives of mere generosity, or of State policy, of which nd service or duty to be rendered, or other remunerative condition, forms a consideration, which may be revoked at the pleasure of the. legislature. — Cooley on Taxation, 54. To this class of statutes, denominated privilegia favorabilia, belong-the statutes which were the subject of consideration in Dale v. Governor, 3 Stew. 387; Christ Church v. County, 24 How. 300; East Saginaw Salt Manufacturing Co. v. East Saginaw, 19 Mich. 259; s. c., reported as Salt Company v. East Saginaw, 13 Wall. 373. The distinction between these cases, in.which,, to use the language of Mr. Justice Campbell, in Christ Church v. County, supra, “ the concession of the legislature was spontaneous, and no service or duty, or other remunerative condition, was imposed on the corporation,” and the case before us, is most manifest. The construction and operation of a railway, in its nature a public highway, the company operating it a common carrier, bound to the transportation of property and persons for a reasonable compensation, thereby promoting public and private convenience, were the benefits to the public, forming a consideration for the act of incorporation, including all its grants of rights and privileges.
It is not necessary now to determine the relation of the “Port of Mobile” to the former corporation of the “City of Mobilewhether it is a new and distinct corporation, or a *574mere continuation, under a new name, and the successor of the former municipality, bound by its obligations, and subject to its liabilities. The contract of which the appellant claims the benefit, was not made with the corporation known as the “ City of Mobile,” but with the State; and it is in restraint of the power of the State to confer or to delegate taxing powers to a municipality contravening its provisions. • A municipal corporation has no inherent taxing power; the power it can rightfully exercise, is that which the State may deem it expedient to delegate. When the power is expressly delegated, the corporation can not relinquish it; nor within the delegation is there included any power to discriminate in the imposition of taxation, relieving particular property, or the property of particular persons, natural or artificial, from the burdens it may impose on the property of others of like kind. It may admit of doubt, whether the general statute of December 8, 1880, authorizing the municipal authorities to levy and collect an annual tax of three-fourths of one per centum on the value of all the real estate and personal property within the limits of the city of Mobile, was intended to affect or to repeal the special statutory provision incorporated in the charter of the appellant. Special legislation is not, generally, by implication repealed by subsequent general legislation relating to the same subject. However that may be, the charter of the appellant affords it immunity from any other municipal taxation than that which the State stipulated it should bear. The stipulation, it must be observed, relates only to the taxation of the railway, rolling-stock, equipments and appendages. It does • not refer to any other species of property within the municipal boundaries, owned by the appellant, the legitimate subject of municipal taxation.
The Circuit Court erred in its rulings; and the judgment must be reversed, and the cause remanded.