Court Opinion

ID: 5557532
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:44:00.822476+00
Date Added: 2024-06-11T08:35:22.549567
License: Public Domain

McCay, Judge,
concurring.
On the 24th of October, 1870, the general assembly passed an act entitled an act to authorize the lease of the Western and Atlantic Railroad, and for other purposes therein mentioned.
Section 1st authorized the governor to lease said road, de*436pots, stock and appurtenances, to a company to be formed, for twenty years, at a rental of not less than $25,000 per month, and provided that should the company fail or refuse to pay the rent, the lease should he forfeited, and made it the duty of the governor so to declare, and to take possession, etc.
Section 4th provided that as soon as the terms of the lease should be agreed on and the names of the lessees entered on the minutes of the executive department, such persons shall then and from that time be a body corporate for the term of twenty years, under the name of the Western and Atlantic •Railroad Company, and gave them the usual powers of a corporation, for the purposes of their.business.
Section 11th is in these words: “Said lessees shall never charge a higher rate of local freights on said road than the average rate charged by the Georgia Railroad, the Central Railroad, and the Macon and Western Railroad, for like local freights over said roads, and the said company shall have the same exemptions, privileges, immunities, rights and guarantees,- and shall be subject .to the liabilities, disabilities and public burdens of said railroad companies, a/nd no more, in all cases where this act is silent: Provided that this act shall not be construed to confer banking privileges on said company.”
Section 2d, after providing that on a failure of the lessees to pay the rent, the lease shall be forfeited, etc., declares: “But the faith of the state is hereby pledged to said company that they shall, in no -case, be disturbed by the authority of the state so long as they keep the contract on their part, and make the payments when due.”
By the charters of the three railroad companies mentioned in section 11 of the lease act, said roads were at that time exempt from taxation at any higher or greater rate than one-half of one per cent, on their net income. The charters of the Central and Georgia Railroads were charters granted before 1863, and were not under section 1636 of the Code of 1863. The exemption of the Macon and Western Railroad was under the act of 1869, and was subject to withdrawal.
Held, 1st. That this lease, with all its incidents, is a con*437tract between the state of Georgia and the lessees; that the provision for a forfeiture on the failure to pay is a provision for the benefit of the state, and not of the lessees, and is optional on the part of the state, on a failure of the lessees to pay, and stands on the footing of the right of a landlord'to dispossess his tenant on a breach of his contract.
2d. That by the terms of the act the lessees, when the lease was effected, became ipso fcieto a corporate body, and hold and are bound to accept corporate powers, as a condition of the contract.
3d. That according to the 11th section of the lease act, the state, upon. its part, stipulated that said lessees should bear the public burdens and have the exemption of said three railroads, and the said lessees contracted that they would undertake such “public burdens.” That one of said “public burdens” was a tax of one-half of one per cent, on its net income, and one of said exemptions was that no other or higher tax should be imposed.
4th. The corporate powers of said Western and Atlantic Eailroad Company stand upon the same footing as the other rights, privileges, and duties it holds and is subject to under the lease act; and it holds them free from any disturbance on the part of the state, either by the executive or legislative authority of the state, so long as they pay the rental — the tax stipulated of one-half of one per cent, on their net income, and perform the other duties undertaken in the contract.
5th. If the tax act of 1874 applies to the Western and Atlantic Eailroad Company at all, beyond the provision for the tax of one-half of one per cent, on the net income, it is in violation of article I., section 10, paragraph 1 of the constitution of the United States, and is void, as impairing the obligation of the lease contract authorized by the act of October 24th, 1870.