Court Opinion

ID: 8019120
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:08:27.616129+00
Date Added: 2024-06-11T16:36:33.263212
License: Public Domain

URAVE1S, J.
(dissenting). — We do not concur in the result reached by, nor in the views expressed in, the opinion by our learned brother writing for the majority. The ordinance No. 21087, the validity of which is attacked in this case, is fully set out in the principal opinion, and we shall not encumber this opinion with a repetition thereof. But for a proper discussion of the sundry questions raised, there are certain “stage settings” of the case which should be set forth.
It will suffice to say of the ordinance in question, known as the “Mill-Tax Ordinance,” that it authorizes the city to collect from the defendant at the end of every three months two per cent of its gross earnings in carrying passengers for the preceding three months. Prior to this time the city had, under ordinance (whether valid or invalid for the purpose of this case, *467we need not discuss) been collecting a license fee of $25 per car per year. This ordinance antedated by many years tbe present city charter and the charter in force at the adoption of the “Mill-Tax Ordinance.” The authority for this ordinance evidently came from the acts of 1868 and 1869, which so far as material read:
Sections 2 and 3 of the former act read as follows:
“Sec. 2. The annual tax levied or assessed for State, county or city purposes upon street railway companies in the city of St. Louis, shall be assessed upon the value of the property owned by each of said companies in the same manner as assessments are made on the property of individuals in said city.
“Sec. 3. In addition to the annual tax herein provided, each of said railway companies in the city of St. Louis shall pay a license to said city, which license shall be fixed by ordinance, but shall not exceed the sum of twenty-five dollars per annum for each car run by said companies, respectively.” [Laws 1868, p. 297.] Section 3 of the act of 1869 reads as follows:
“Sec. 3. In addition to the annual tax herein provided, each of said railway companies shall pay a license to the city of St. Louis to be fixed by ordinance of said city, not exceeding twenty-five dollars per annum for each car run by said companies respectively and the taxes and license payable under the provisions of this act shall-be in lieu of all taxes, burdens, expenditures and repairs of streets outside of their track required of such companies by former laws and ordinances.” [Laws 1869, p. 207.]
It should be noted that under the. original State law there was a dual power given to the city (1) to assess, levy and collect a city tax upon the property of street railroads, as in the case of other property and (2) to collect, as a license tax, not exceeding $25 per car per year. In 1897 the power to assess street railway property, was by act of the Legislature, taken *468from the city, and placed in the hands of the State Board of Equalization. It has so remained from that time to this.
In 1898 the city of St. Louis granted to the defendant a franchise to “construct, maintain and operate a street railway system on the streets of St. Louis” upon conditions prescribed in an ordinance. For this privilege or franchise, the defendant, was, among other things to be done, required to pay the city annually the sum of $10,000 for the first ten years of the franchise; $15,000 for the second ten years; $20,000 for the third ten years; $25,000 for the fourth ten years, and $30,000 for the remainder of the franchise term. These payments, so far as they have become due, have been paid by defendant, and received by the city. This franchise right was granted for the period of fifty years, and the payments to the city were to be made on the first day of January and July of each year. The defendant had, with the consent of the city, purchased some nine street-railway lines in the city, and has met the requirements of the ordinances under which said companies procured their franchises. At the time this said defendant procured its franchise rights from the city, and agreed to make the payments above indicated in consideration therefor, the charter provisions of the city (Sec. 1, art. 10) read:
“The Municipal Assembly . . . shall have power to sell the franchise or right of way for such street railroads to the highest bidder, or as a consideration therefor, to impose a per capita tax on the passengers transported or an annual tax on the gross receipts of such railroad, or on each car.”
Later, in the year 1901 (Laws 1901, p. 232) the Legislature authorized the State Board of Equalization to assess the franchises of a-street railway company for the purposes of taxation. In other words, everything was to be assessed and taxed, except the bare right to be a corporation.
*469The ordinance involved in this suit was approved March 25, 1903, and hence is subsequent in point of time to the State law of 1901 directing the assessment of a franchise for taxation.
With this brief outline of the case settings we will leave matters of more detail to the course of the opinion.
Double Taxation I. To the fair-minded man, it occurs to us that the result of sustaining the validity of this ordinance is appalling. This suit involves a tax for the year 1910. During the same year the appellant paid in general ^axes TP031 As property and franchises $442,353.91; in special taxes, $5516.25, and under the different ordinances granting franchises to it and its subsidiary companies, $149,246.17. A part of the first item went to the city as city taxes upon property in general, and all of the last two items went to the city. If this ordinance in question is valid then for the year 1910 there is added an additional revenue tax for the city of over $200,000. In other words, the city in addition to getting its proportionate part of $442,353.91 assessed as a general property tax on the property and franchises (except the mere right to be a corporation) of the defendant, is to get $149,246.17 plus over $200,000 provided for by this ordinance, for the exercise of the already taxed franchises, in the said city. To my mind this ordinance provides for double taxation pure and simple, and for that reason ought to be condemned. If such a scheme as the one in question were perpetrated upon the individual citizens of this State, public clamor and yellow journalism would sweep sober thoughts from the public mind. These things of course would be no excuse for disturbing the equipoise of the judicial mind. With that mind the polar star should be fixed legal principles applicable, without distinction or difference, to both corporations and individuals.
*470Double taxation is an abomination in tbe eyes of tbe law. It should not be tolerated against the corporation, any more than it is tolerated against the individual. If it is wrong in principle as to the one it is wrong in principle as to the other. Recognized, announced and tolerated in a corporation’s case the precedent will rise up to plague the court in other cases. The right thing is to denounce the principle of double taxation wherever it appears. The doctrine for which we contend has been so forcibly expressed by our learned Chief Justice, in the case of State ex rel. v. Railroads, 196 Mo. l. c. 534, that we content ourselves with his pronouncement of the Missouri rule. Judge Lamm there said:
£ £ There being evidence from which the court could find the same property had been assessed and the taxes for 1900 paid in another form, we confront the question of double taxation.
“Under one subtle form or other, duplicate taxation may edge itself, at least in a speculative way, into taxing schemes where the intent of the lawmaker is unmistakable; but double taxation is not favored and is never presumed. [Tennessee v. Whitworth, 117 U. S. l. c. 137.]
“In Rice Co. Comrs. v. Bank, 23 Minn. 280, it was said: £The general policy of the law is to avoid duplicate taxation. No one subject of taxation ought to be required to contribute more than once to the same public burden, while other subjects of taxation, belonging to the same class, are required to contribute but once. In the exposition of any tax law, therefore, a construction leading to any such result should be avoided, unless the cogency of some express provision or unavoidable implication of the statutes compels its adoption. Says Judge Cooley, in his valuable treatise on the law of taxation: “It is a fundamental maxim in taxation that the same property shall not be subject to a double tax payable by the same party, either directly or *471indirectly; and, when it is once decided that any kind or class of property is liable to be taxed under one provision of the statute, it has been held to ^follow, as a legal conclusion, that the Legislature could not have intended the same property should be subject to another tax, though there may be general words in the law which would seem to imply that it may be taxed a second time.” [Cooley on Taxation, 165, and authorities cited in the notes.] Especially should this rule obtain in the courts of a State whose Constitution contains an express provision requiring equality and uniformity in the imposition of taxes upon property, according to a cash valuation.’
“Our own Constitution (Art. 10, sec. 4), provides that ‘all property subject to taxation shall be taxed in proportion to its value,’ and section 3, ibid., requires that ‘taxes shall uniform upon the same class of subjects within the territorial limits of the authority levying the tax.’
“In State v. Railroad, 77 Mo. 202, the question of duplicate taxation was under consideration and the same conclusion reached as in the Minnesota case, supra.
“An examination of the statutes of 1889, relating to the taxation of railroads (Art. 8, chap. 138) and bridges (Art. 9, ibid.) discloses no legislative intent to lay upon respondents’ property a burden of double taxation, even if such doubtful power be conceded to exist; and therefore, a mandatory instruction in this case might well have been given on the broad ground that the bridge was assessed and taxed for the year 1900 as a part of the railroad, and the taxes sued for once paid in that form. ’ ’
By the franchise granted to the defendant by the city, and paid for by the defendant to the city, the defendant was granted the right “to lay down, construct, operate, and maintain a single and double track street railway on, over and along the route as described in *472section, two of this ordinance,” etc. — ordinance No. 19352, passed by both branches of the city legislature April 12, 1898, over the mayor’s veto. In this same ordinance is the following:'
“This franchise shall continue in force for a period of fifty years from the date of its passage.
“In consideration of the rights and franchise granted in this ordinance to the Central Traction Company of St. Louis, said Traction Company shall pay to the city of St. Louis as follows: Semiannually on the first of January and July of each year, beginning from the time herein authorized for the completion of said railway, for the first ten years, ten thousand dollars per annum; for the second ten years, fifteen thousand dollars per annum; for the third ten years, twenty thou-; sand dollars per annum; for the fourth ten years, twenty-five thousand dollars per annum; and for the.remainder of the time of this franchise, thirty thousand dollars per annum.”
The ordinances granting the franchises to- the nine subsidiary street railway corporations, absorbed and taken over by the defendant, contained the same kind of a grant of privilege, i. e., a right to construct, operate and maintain a street railway. They contained similar provisions for payment to the city for the franchise. One example will suffice. In ordinance No. 11528 we find this language:
“In consideration of the rights and franchises hereby granted, confirmed and extended to the Citizens ’ Railway Company, its successors and assigns, the said company shall pay to the city of 'St. Louis on the first day of July and the first of January of each year until and including January first, eighteen hundred and eighty-four, the sum of twenty-five hundred dollars, and on the first day of July and the first day of January of each year after January first, eighteen hundred and eighty-four, until the expiration of the time for which this franchise is granted, the sum of five thousand dol*473lars, which shall be in addition to all taxes as now or hereafter prescribed by law. ’ ’
So that it appears that under the divers and sundry ordinances, granting the privileges possessed by the defendant, the defendant in 1910 had to pay to the city the sum of $149,246.17. And we emphasize the fact, that it was paying this sum for the privilege “to construct, operate and maintain” a street railway in the city of St. Louis. What does the word “operate” mean in ordinances of this character, if it does not mean the running of cars over the tracks? No refinement of argument can give the word thus used another or different meaning. The city therefore had, prior to the ordinance involved in this case, and at the times the several franchises were granted, fixed the price of the occupation tax (if it should be so called) of the defendant.
Not only so, but during all these years it has, and now is collecting this tax from the defendant. The very ordinance in question here in one of its sections undertakes to preserve the right of the city to collect this tax.
It may be that by the ordinance No.-19352 passed in April 12, 1898, the city authorities did not exact as much of a license tax as they should have’done for the operation of a street car line in the city, and the may- or ’s veto would so indicate, but the courts have nothing to do with the question in this case. It may be that valuable city rights were frittered away about that time by a heedless body of legislative servants, but we are not called upon to try that case. If we call to our assistance public State history the said public servants may have been more than heedless in St. Louis at about that date, but the citizenship of that great city commissioned them to act for the city, and the courts are powerless in many instances to render assistance, and this case is one of the instances. The vital question here is the one of double taxation, and it matters not *474whether we speak of a general tax, or of an occupation tax. Double taxation is an abomination in the one class as in the other, in the eyes of the law. The ordinance before ns imposes a tax upon the defendant for the right to operate its cars on the streets of St. Louis. No amount of ingenuity can erase this fact from the case. Neither can specious argument erase it. The fact stands out in bold relief. By other’ ordinances the city is already collecting from the defendant over $149,000 for the self-same purpose and for the self-same privilege. It is true that the other ordinances contain the. additional rights of constructing and maintaining the tracks, but the consideration paid covers the operating as well.
So if we call this tax a mere occupation tax, or a tax upon the privilege or right to run or operate a street car in the city of St. Louis, it is, under the facts in this case, double taxation. It is the levying and collecting of the same kind of tax (by whatever name it be called) twice during the same period of time and from the same party. For this reason we should hold this ordinance void and refuse to enforce its iniquitous terms.
Franchisef Double. II. Counsel for respondent seem loth to name the tax provided for in the ordinance. In one place distinguished counsel ask the ques-“Is the tax in question an occupation taxi” and then proceed to answer their own question by both “yes” and “no.” [Respondent’s Brief, p. 13.] Following this double answer are these words:
“The tax is levied upon the privilege of operating street ears upon the public streets, and has no relation whatever to the ownership of the power houses, tracks or even of the cars themselves.”
Later at page 22 they say under subhead E of point VIII:
*475“The exaction in question here is a tax, not a fee exacted under the police power.”
Then under point IX, p. 22, they further say:
‘ ‘ This tax is levied upon the privilege of operating street cars, and it is entirely proper to bring suit in one count for the tax upon that privilege for one quarter of the year. ’ ’
If it is a tax upon the privilege of “operating street cars-on the streets” in the city of St. Louis, the defendant is not only paying this tax under other ordinances discussed in our paragraph one, but it is likewise paying such a tax to the city under the general laws of the State upon this same privilege. The State law upon the subject of taxing franchises is short, and we quote it:
“Sec. 11551. The franchises (other than the right to be a corporation) of all railroad, street railroad, bridge, telegraph, telephone, conduit, water, electric light and gas companies, and of all other similar corporations owning, operating and managing public utilities, and of all quasi-public corporations possessing special and peculiar- privileges and authorized by law to perform any public service (except corporations formed for religious, educational and benevolent purposes) shall be assessed for the purposes of taxation at the same time and in the same manner as other property of such corporation is now or may hereafter be required to be assessed; and there shall be levied upon the assessed value of such franchise the same rate of taxation as may be levied upon other property of such corporation. Said tax shall be due and payable, and like proceedings may be had to collect the same, and when collected it shall be disposed of in the same way as the taxes imposed upon the other property of such corporation.
“Sec. 11552. The State Board of Equalization in cases of railroads, street railroads, bridges, telegraph, *476telephone companies and all other corporations whose property the State Board of Equalization is now or may hereafter be required to assess, and the county assessor, in case of the other quasi-public corporations referred to in the preceeding section, shall ascertain, fix and determine the total value for taxable purposes of the entire property of such corporation, tangible and intangible, in this State, and shall then assess the tangible property and deduct the amount of such assessment from the total valuation and enter the remainder upon the assessment list or in the assessor’s-books, under the head of ‘all other property.’ ” [B. S. 1909, chap. 117, art. 11.]
The “franchise” of a street railway company includes the very right covered by the ordinance attacked here. The “franchise” mentioned in the statutes, supra, includes the right granted by the city and the State to operate street cars upon and over the streets of the city. It cannot be seriously contended that the “franchises” as used in these statutes is meant to cover everything possessed by the corporation, except the bare right to be a corporation. So says the statute and so it must be held. These statutes require the State assessing power to find the money value of the right or privilege of operating street cars upon the streets of St. Louis, possessed by the defendant. When this right, privilege or franchise has been reduced to a money value by the State Board of Equalization, then upon that money value, the city of St. Louis levies its tax for city purposes, and it is collected and turned into the city coffers. This tax is near $2 per $100 valuation, but the amount is immaterial. The material point is that there.is double •taxation upon the same subject of taxation. What is meant by the “franchise” of a street railway company, if it is not (among other rights) the right, privilege or franchise to run and operate cars for the trans*477portation of passengers'? This very right the State law says shall be estimated in money, and upon the sum so estimated, state, county and city taxes shall be paid. This right has, by these statutes, been made taxable property, and upon such made taxable property the city levies its taxes.
This law of the State disrobes the city of the power to tax this right, privilege or franchise, a second time. The very right to run a street car is made property for the purpose of taxation by these statutes, and by other statutes the city’s method of collecting its tax on such assessed property is provided, but it is not by an ordinance of the character here involved. We are not talking of a license fee for regulatory purposes, because no one has ever suggested that this ordinance prescribes such a fee. There is nothing of regulation found in the ordinance. It is a revenue producer pure and simple, and is so branded by every expression therein. There is and should be a difference between a street railway, whose very right to operate cars in the street (its franchise, because the right it has to be and operate there is its franchise) is made property for taxation, and an individual or other kind of corporation, whose very right to be in the street is not made property for the purpose of taxation. To illustrate: John Jones, an individual, is running twenty-five carriages or taxicabs for the transportation of passengers in the city. When his property is assessed for taxation, it is not assessed with any reference to its use or the place of its use. It is assessed as horses, carriages, or taxicabs. With him the very right to be on the street in the use of his horses, carriages and taxicabs is not made property for taxation. With him it would not be double taxation for the city to collect a tax from him for the privilege of running his business on the streets. The same is true of an ordinary business corporation *478which might own the same kind of a business. In other words what would be, under the law, double taxation as to the street-car corporation, would not be double taxation as to the individual or business corporation above discussed. As to this defendant, whose franchise to operate street cars is by law made property for assessment and tax-paying’, the city cannot levy this additional tax upon this property. It is stated in the briefs, and not denied, that the city tax rate is $1.45 per $100, and at this rate the defendant pays taxes upon the very property now sought to be taxed by the ordinance in question. In other words the city is now asking about $2 per $100 on the identical property assessed and taxed under the State scheme. The powers granted to the city by article 10, section 1 of the charter, as fully set out in our preliminary statement, were fully exercised and exhausted when the several franchises owned and possessed by the defendant were granted. No other charter provision can stand as against the State law, supra.
This exact question is fully discussed, and well discussed, by the Court of Appeals in Kentucky in the case of Cumberland Telephone & Telegraph Co. v. Hopkins, 121 Ky. 850, l. c. 856. That court said:
“Railroad and telephone companies are required to pay to the State a franchise tax, as well as being required to pay a franchise tax to each county, city, or town in which it may be exercised, if such municipality imposes an ad valorem tax. [Sec. 4077, Ky. Stats. 1903; Sec. 174, Constitution.] These companies are included in what are called ‘public service corporations-,’ exercising powers and having privileges not enjoyed by natural persons or other corporations. The-main point of contention is, what is the franchise upon which these taxes are imposed? A corporation’s franchise may be one thing or another. The word is not always used with reference to the same meaning. *479It is sometimes regarded as the mere right to be a corporation. Again, it is treated as the right to do the particular and peculiar business for which the corporation was created. It is also spoken of as the right to do its business in a certain locality, as, for example, where the Constitution requires certain franchises to be sold by cities and towns. [Sec. 164, Constitution.] The other two qualities of a corporate franchise may have existed before the acquisition of the latter, and are therefore in a sense quite distinct from it. For the purposes of taxation, it may be all of them and more. [Henderson Bridge Co. v. Commonwealth, 99 Ky. 623, 29 L. R. A. 73.] While corporate franchises have long been recognized factors of incorporated beings, they have only recently come to be regarded as separate subjects of taxation. In the rapid development of these artificial creatures of the law (corporations) as means of holding and using property in active business, the corporate franchise has come to have a recognized value of enormous magnitude, when viewed in the aggregate. It is not the least — indeed, frequently is the greater — element of the corporation’s wealth. That it should be taxed, should be made to bear its share of the public burden together with all other wealth, is fundamentally true in justice and in political economy. So far, no exact definition of it has been given upon which the courts have felt willing to finally rest the matter. And perhaps it is well enough for the present that this is so. Still certain qualities of the corporate franchise are so well known and classified as to be beyond dispute as being elements of its taxable value. The mere right to be a corporation is taxed in the exacting of the organization tax upon its creation. This is collected once, and absolutely without reference to its property or whether it ever engaged in the business contemplated by its articles. [Sec. 4226, Ky. St. 1903.] *480The right of certain corporations to do business in a city, which it must acquire (if acquired since the present Constitution) by purchase of the franchise from the city, includes the compensation for occupying the public thoroughfares of the city. But it also may include more than that, which will be further noticed in this opinion. Each of these ar.e qualities of the general corporate franchise. Yet, as used in the taxing statute of this State, the word has a more comprehensive meaning. It is treated as property. It is property. It adds materially to the value of the tangi ble property of the corporation. The right to exercise the powers allowed to the corporation by law, the peculiar and exceptional privileges it enjoys, partaking partially of the quality of sovereignty, give to its use of its tangible property, as well as to its intangible property comprised within its capital stock, a value which otherwise could not attach to them, so that this privileged use becomes to the visible assets of the corporation what the leaven is to the loaf. While it may not be laid hold of separately, it is quite capable of being conceived and valued as a thing worth so much money. This value will depend largely upon its money-earning capacity as it may be employed, and -depends at last upon its being exercised. Unless used substantially as outlined in the articles under which it is created, it could scarcely be said to have a money value at all. For, unlike tangible property, or even choses in action, it cannot be sold and trafficked in, nor consumed, nor otherwise enjoyed than in the corporate use of it. It is true that by statute, as construed by this court in Henderson Bridge Co. v. Commonwealth, supra, when treating of railroad corporations, the franchise is deemed to include so much of the capital of the corporation and of its other intangible assets as is represented by the difference between the total value of its money-earning capacity and the *481separate value of its tangible property. Tbe franchise of a railroad company may then be accepted for purposes of taxation as the earning value ascribed to its capital by reason of its operation as a common carrier of freight and passengers. Further than that the legislation in this State on that subject has not gone.
“Railroads are required to pay taxes upon their tangible property. The mode of taxing it is set out by statute. [Secs. 4096-4104, Ky. St. 1903.] It is to be valued as an entire piece of property ‘for the purpose of being operated as a carrier of freight and passengers.’ [Sec. 4096, Ky. St. 1903.] That is, the roadbed including right of way and tracks, depots, sidings, and its cars, equipage, and tools, are to be taxed in the aggregate as a railroad. The franchise tax is ‘in addition to the other taxes imposed on it by law’ (Sec. 4077, Ky. St. 1903), and is meant to cover all the intangible property of the concern, as represented by the earning value of its capital, employed in the specific business of a carrier of freight and passengers. The valuation of this corporate franchise by the State Board of Valuation and Assessment is made by section 4077, supra, the basis for municipal taxation in every municipality in which the corporate franchise may be exercised. In the case at bar’ it is conceded that appellant railroad company’s franchise was so valued and was certified as apportioned to the city of Eminence and the franchise tax paid thereon for the year in controversy. The power given to municipal corporations by section 181, Constitution, and section 3637, Ky. St. 1903, to impose and collect license fees upon all franchises, is a revenue provision. It is so treated in its classification by the Constitution, and though in the statute it is coupled with other matters more properly coming under the head of police powers, it is in its scope and effect still an act *482to raise revenue for the town in one of the ways permitted by the Constitution. For appellees, it is contended that the franchise tax, which is collected off of appellant railroad company under the general assessment of its franchise, being a property tax, is quite distinct from the occupation tax which the town, under the legislative authority, has imposed. But it is not. It is the same thing; at least, the franchise tax includes the valuing of the capital stock of the railroad when and in the event only it exercises the very privileges sought to be taxed again by the ordinance. The same property may he indirectly and incidently taxed twice is conceded, as, for example, where the owner of mortgaged land pays taxes on it, and the owner of the-' mortgage pays taxes on the evidence of the debt. But it is not the policy of the State to tax the same property twice as against the same owner. The Constitution requires that taxes shall be uniform upon all property subject to taxation. [Sec. 171, Constitution.] If the same property were taxed twice for the same purpose as against the same owner, whereas other property was taxed but once for that purpose as against its owner, the taxation would not be uniform. It would violate, not only the letter of the Constitution, but that spirit and absolute equality before the law which is at the bottom of all free government. The owners of other tangible property in Eminence are not taxed on the privilege of employing it in a certain business, either directly or indirectly, when it is assessed ad valorem. .Therefore, when they are required to pay an occupation tax, as they have no franchise to be taxed or which is taxed, the license fee which they pay is not duplicate taxation in any sense. ”
- The latter part of the above quotation is peculiarly applicable here. In this State our statutes say that everything shall be assessed as the franchise of the street railway corporation, except its mere right to *483be a corporation. This right it paid for at the time of its incorporation. Cases which discuss the right of cities to levy a tax of some kind upon franchises, have no application, unless they discuss it from the standpoint of a State law requiring franchises to be taxed as property.
If the city had the power to tax the franchises of this defendant (a matter we need not discuss for the-purpose of the present point) it. was clearly shorn of that power when the State passed the law for the taxation of franchises as a part and parcel of general property taxes. Under this State scheme the city levies its annual taxes upon the identical property sought to be taxed by this ordinance. The ordinance contravenes this State law and cannot stand. It calls for double taxation, a thing to be condemned, and for that reason cannot stand. Whilst the city has the right to fix terms for its assent to the occupancy of the streets by the appellant, it has exercised that right, and its power in that regard has been exhausted. Under its police power' it may ho doubt pass a regulatory license ordinance, but that is not this ordinance. The very monstrosity of the contention of the city for this right to double tax the defendant upon the franchises of the defendant ought to challenge a guarded and well considered expression of this court. To our mind this ordinance is bad for the reasons hereinabove assigned, and possibly for other reasons which might be assigned. The space of a dissenting opinion will not permit more upon the question of the invalidity of the ordinance. We pass now to the technical defense of res adjudicata.
r Adjudicata III. The case now before us is the case of ‘ ‘ The City of St. Louis v. United Railways Company of Louis” numbered on our docket "17,254. We note this fact, because it is *484this record that we are discussing in this, our dissent. Upon matters of detail we have not examined the records in the other pending cases.
In this case, upon the record before us, the matter of res adjudicata is not here for consideration. In the record before us, at pages 574 and 575, we find that the trial court gave the following instructions asked for by the defendant:
“1. The adjudication in the suit of the United Railways Company v. City of St. Louis pleaded in the petition and offered in evidence does not invest or confer upon the plaintiff any power or authority not invested in it by the charter, the laws or Constitution of this State — and if under its charter, the laws and Constitution of this State, it had no power or authority to pass and enforce the ordinance imposing the charges sued for in this case, it cannot recover, and the verdict must be for the defendant.
“2. The adjudication pleaded in the petition and offered in evidence is not an adjudication of all the issues in the case at bar.
“3. In determining whether the adjudication pleaded in the petition and offered in evidence is res adjudicata or an estoppel, the law of res adjudicata as held by the Supreme Court of the United States must be employed and applied.
“To the giving of said instructions numbered 1, 2 and 3, in behalf of defendant, the plaintiff duly excepted at the time and saved its exceptions. ’ ’
It will be noted that the learned trial judge ruled against the question of res judicata urged by plaintiff, and as plaintiff has not appealed, that question is foreclosed. Not only is this true, but the city asked no instruction upon the question of res judicata. The city asked but one instruction, and that was a general instruction on the right to recover, if the court sitting as a jury found certain facts. Res judicata was not *485one of those facts. The city therefore abandoned that theory of the case nisi and it is not here now, for that reason. We mention this in passing, and not for the purpose of obviating a discussion of the question, be- . cause as it has been discussed in the opinion of our brother wé shall likewise discuss it. However, we will be discussing a question not really in this case. But obiter is as much permissible in a dissent as it is in the principal opinion.
IV. Our brother writing for the majority says:
Extent* ofdRufe.' “The material issue in the equity suit was as to the validity of the ordinance, and the same issue was the burden of defendant’s defense to the suit brought by the city to enforce the ordinance. This being true, the conclusion seems inevitable that defendant is barred by the adjudication in the former suit. ’ ’
If the record in this case supports our brother in the statement that the validity of the ordinance in question was the matter tendered, tried and determined, by the Federal court, then the doctrine of res judicata or estoppel by judgment might have some standing in the case at bar. We have read the bill in equity, the answer, the reply, the judgments, and the opinions in the case of United Railways Company et al. v. The City of St. Louis, and if the legal validity of this ordinance was ever questioned, tendered, tried or decided, we misjudge the language used by counsel in the pleadings, and the courts in their judgments and decrees.
The bill in equity in the Federal court, when fairly construed, asked that court to restrain the enforcement of the ordinance involved here, as against the complainants, because as to them, said ordinance violated and abrogated contract rights, which appellants claimed to have had. The bill could not have alleged more, and given the then complainants a standing in *486the Federal court. The bill had to proceed upon the theory that the ordinance violated contract rights, guaranteed and protected by the Federal Constitution. Piad the bill proceeded upon the theory that the city had no legal or constitutional power to pass such an ordinance under the laws and the Constitution of this State, complainants would have stated themselves out of the Federal court. The general invalidity of that .ordinance was never tendered or decided by either the lower or higher Federal court. We bespeak the careful reading of these pleadings, these judgments and the several opinions filed in the course of that litigation. Especially do we invoke a careful reading of the pleading's in behalf of the city of St. Louis, which now invokes estoppel by judgment.
Our learned brother has quoted from the motion for a reargument of the cause in the United States Supreme Court, where counsel, no doubt driven to desperation by an adverse judgment in -a case of such vital importance, have, in their said desperation, made some unguarded remarks, but we prefer to gather the construction of the pleadings from the'cool and deliberate language of counsel for the city of St. Louis, as found in their answer and in their brief before the United States Supreme Court. Distinguished counsel for the city there said that there were but two points in the case. They had read these pleadings as we have read them. They knew what questions were in the case when the same was passed.upon by Judge Adams for the preliminary injunction and Judge Finkelnburg for the permanent injunction in the inferior Federal court. They knew what assignment of error they, themselves, had presented to the highest tribunal of the land for final determination. With all this knowledge, they in their brief then said:
“This they [complainants] seek to do by the claim: .(1) that the right of way or special ordinances conferring upon them ... the city’s consent of them*487selves imposed such license tax which conld not hence be increased or altered by Ordinance 21087 without their consent; or, (2) that said right of way ordinances should be construed as exempting appellees from all license taxes. These are ultimately the only two points involved in the case.”
The gist of the bill may be fairly summarized thus: Complainants set out all the divers and sundry ordinances by which they acquired the right to own and operate the divers street railways of the city. This is done at great length and with great particularity. We have outlined some of these ordinances heretofore in this opinion. The bill thus proceeds:
“And notwithstanding the premises, the said city of St. Louis is now demanding, under pretense of authority of the said last named ordinance, of the complainants herein, that they shall pay to the said city of St. Louis, on all revenue or pay passengers carried by them, the said sum of one mill for each revenue or pay passenger so carried over the lines of said railway owned by the said United Railways Company of St. Louis, in the said city of St. Louis, and operated by the said St. Louis Transit Company.
“And complainants show that the said city of St. Louis pretends and claims that the said charge of one mill for each revenue or pay passenger, assumed to be provided for and imposed by said ordinance numbered 21087, is required to be paid by these complainants in addition to the several sums and taxes and percentages on the gross receipts provided to be paid under the several ordinances granting to the United Railways Company of St. Louis and the St. Louis Transit Company, and their predecessors in right and title, the right to construct, maintain and operate their lines of street railway in the said city of St. Louis.
“And these complainants show that the said ordinance numbered 21087, if by its terms it imposes such additional charge, is illegal, unconstitutional and void, *488because imposing a tax, charge or consideration for rights, privileges and franchises theretofore granted to and already possessed by the complainants. And said ordinance is in violation of the provisions of the Constitution of the United States, section 10 of article 1 thereof, which provides that no State shall pass any law impairing the obligations of contracts, and is in violation of article 14 of the Amendments to the Constitution of the United States, which provides that no State shall deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws.
“The complainants show that said ordinance, if it imposes the charge of one mill or any other sum upon each revenue or pay passenger carried by the complainants over their lines of street railway in the said city of St. Louis, impairs the obligation of the contracts made by the several ordinances hereinbefore recited, by imposing additional and heavy burdens and charges as a condition of using,' enjoying or exercising the rights and franchises granted by said special ordinances, and, by assumed legislative enactment, deprives these complainants of their property without due process, of law, and withholds from them the equal protection of the laws.
“And these complainants show that the said so-called license, assumed to be imposed by the said ordinance numbered 21087, is not a license fee, but is a charge and a compensation assumed to be exacted from these complainants as a consideration for rig’hts and franchises already granted to them by contracts with the city of St. Louis and paid for by complainants, in accordance with the provisions of said contracts.
“And these complainants show that the said United Railways Company of St. Louis purchased the properties, and constructed the lines of railway, hereinbefore mentioned, and the said St. Louis Transit *489Company leased the same, upon the faith of the inviolability of the said contracts between the said companies, - and their predecessors in right and title, and the said city of St. Lonis, and the bonds and stocks in large amounts of the said companies were negotiated, and are now held by many persons, who acquired the same on such faith, and the value of the properties, rights, franchises and privileges of said companies, and their bonds and stocks, will be greatly impaired and depreciated if said ordinance numbered 21087 is enforced according to its terms as asserted by said city of St. Louis.
“And these complainants show that the said city of St. Louis intends and threatens to and will, unless prevented by the interposition of this honorable court, assert the said ordinance numbered 21087 against these complainants, as imposing a present and existing charge upon them of one mill for every revenue passenger carried by them, and thereby east a cloud upon' the title of the properties of these complainants, greatly impairing their credit, and the said ordinance if' enforced according to its terms, will deprive these complainants of revenues amounting approximately to one hundred and fifty thousand dollars per annum, which are absolutely required for the purpose of making extensions and procuring additional equipments essential to the proper conduct of the service assumed by them, and to the proper discharge of the obligations imposed upon them by the several special ordinances hereinbefore set forth. And the said city intends and threatens to, and will, unless prevented by the interposition of this honorable court, institute numerous vexatious legal proceedings to compel complainants to comply with the provisions of said ordinances numbered 21087, in the form of suits to recover the penalties prescribed by said ordinance, and by suits to forfeit franchise, rights and privileges acquired and held under the provisions of the several special ordinances *490hereinbefore set forth, and as a result, complainants will be subjected to a great loss, damage, hindrance, and annoyance in the conduct of their business, which they are entitled to carry on without such proceedings, suits, annoyances, hindrance, loss and damage, and will be greatly impaired in their ability to properly conduct the service assumed by them and imposed upon them by the said special ordinances above mentioned.”
There are some matters mentioned which are mere matters of inducement. The gist of the bill is as above.
In the answer, after making certain admissions, the city of St. Louis thus clearly gives its conception of the plaintiffs ’ bill:
“The defendant states that said ordinance 21087 does not in any way interfere with or violate the provisions of any contract or any privilege conferred upon the complainants or any of their assignors; that the obligations assumed by complainants and their assign- ' ors in the respective ordinances conferring franchises, rights and privileges were in no sense license fees or license taxes upon street ears, but only conditions under which the city consented that said complainants and their assignors could obtain the valuable rights to the use of its streets, and no way operate to exempt complainants from the imposition of license taxes for the exercise of their business and the rights conferred by said franchises. On the contrary defendant avers that said ordinance was enacted in lieu of a prior ordinance therein repealed, which provided for a license fee or tax of $25 each year on each street car operated by any street company and which license fee and tax complainants had regularly paid and recognized; and that said ordinance 21087 is strictly also a license fee or tax on each street car, and accurately considered is not, as alleged by complainant, a charge against the said companies upon the gross receipts from the carriage of passengers exceeding two per cent of the same.
*491“And defendant further states that said United Railways Company when it accepted the provisions of said ordinances referred to in said bill conferring the alleged franchises, rights and privileges, and purchased the properties, and constructed the lines of railway in said bill mentioned, and at all other times, and the St. Louis Transit Company when it entered into the alleged lease mentioned in said bill, and at all other times, and all the assignors of either of said companies, did so with the full knowledge of the rights and authority of this defendant to enact said ordinance 21087.
“And defendant specially denies that the amount required is as alleged by complainants ‘absolutely required for. the purpose of making' extensions and procuring additional equipments.essential to the proper conduct of the service assumed by them, and to the proper discharge of the obligations imposed upon them by the several ordinances’ by them set forth; and defendant states that if said allegations were truth it would be owing to the obligations incurred by complainants to pay dividends on preferred stock, interest or mortgages and other heavy' expenses based on a fictitious valuation of their assets and capital stock which is by them treated and held out to stockholders, bondholders and others at an amount' many millions of dollars above its actual and honest value; and that the business of said companies and their receipts yields very large profits upon the basis of the actual assets invested and yields large profits even upon the fictitious valuation of assets above stated, far in excess of the amounts required for the purposes stated by complainants, but that if complainants are unable or indisposed to continue their said business and comply with the lawful and reasonable ordinances of this defendant, the charter provisions hereinbefore set forth and section 1790a of ordinance 21113, approved April 6, 1903, passed in pursuance thereof, provided for the *492surrender of their said franchises and chartered rights, which action complainants have declined to adopt, but on the contrary, in open violation of said ordinance 21087, operate street cars and engage in the business of transporting passengers from one point to another in the city, for hire, on street railways, without paying or applying for any license to said city, or complying with any one of the provisions of said ordinance.
“Defendant further states that said ordinance 21087 is of a general nature, applicable to all persons and companies equally with complainants, and that said St. Louis Transit Company expressly agreed on May 3, 1899, with defendant, as one of the conditions under which it could derive or exercise any rights or interest under ordinance 19738 referred to in said complainants’ bill, and without which the same would not have become effective, to accept all obligations therein imposed on said complainants, and also to comply with all the terms and conditions of all valid general ordinances then in force or at any time thereafter to be passed in reference to street railways; and said respective assignors of complainants entered into similar agreements as a condition permitting them to assign such rights or franchises to complainants or either of them, wherein said assignors and each of them agree to accept all valid general ordinances then in force or which might be passed at any time thereafter:
“Wherefore defendant having fully answered, prays to be hence discharged without day and that complainants be required to pay its costs herein incurred.”
In the lower Federal court the city lost its case. The two opinions of the judges passing upon the case, made a part of the record in this case, show that they passed upon but the one question, i. e., that the ordinance, as to complainants, violated ■ contract rights. The assignment of error made in that case, which was the foundation of the appeal to the Supreme Court, reads:
*493‘ ‘ Comes now the city of St. Louis, defendant in the above entitled cause, and says that the decree in said case is erroneous and against the just rights of said defendant, for the following reasons:
“1st. That complainant’s bill is not sufficient in law to entitle complainants to the relief granted in said decree, nor to any relief whatever.
“2d. The court erred in enjoining the defendant from enforcing against the complainant ordinance No. 21087 of the city of St. Louis.
“3d. The court erred in holding that ordinance No.'21087 of the city of St. Louis in any way operated to impair the obligations of any contract between complainant, or any assignors, and defendant.
“4th. Tbe court erred in holding that ordinance No. 21087 of tbe city of St. Louis impaired the obligations of any of tbe special franchise ordinances of tbe city of St. Louis granting to tbe complainant tbe consent of tbe city of St. Louis to tbe construction, maintenance and operation of its road within tbe city of St. Louis.
‘ ‘ 5th. Tbe court erred in bolding that tbe various special franchise ordinances under which complainant, or its assignors, obtained tbe consent of tbe city of St. Louis to construct, operate and maintain street railways in said city, precluded the defendant, tbe city of St. Louis, from requiring complainants to pay a license tax on each car.
“6th. Tbe court erred in bolding that tbe city of St. Louis, by tbe special franchise ordinances granting complainant, or its assignors, the consent of tbe city of St. Louis to tbe construction, maintenance and operation of its street railway in said city, exempted tbe complainant from tbe imposition of a license tax provided for by ordinance No. 21087 of said city of St. Louis.
“7th. Tbe court, after erroneously bolding that tbe assignors of complainants were exempted from *494the payment of a license tax by virtue of the special franchise ordinance granting it, or its assignors, the consent of the city of St. Louis to construct, operate and maintain its street railway within said city, further erred in holding' that such alleged exemption passed to the complainants as assignees.
“8th. The court erred in holding’ that the city of St. Louis had, in the divers and sundry special franchise ordinances by which complainant or its assignors obtained the consent of the city of St. Louis to construct, operate and maintain its street railway within said city, imposed a license tax or any tax at all; and the court -further erred in holding that the city of St. Louis could not lawfully amend, alter or change its taxing laws or ordinances.
“9th. The court erred in holding that the city of St. Louis did not have the right, under its charter, subject to which the complainants took their privileges, to repeal, alter or amend the special franchise ordinances under which complainant obtained the consent of the city to construct, operate and maintain its street railway within said city.
“Wherefore defendant, the city of St. Louis, prays that the decree of the circuit court be reversed, and that said court be directed to enter a decree in favor of said defendant.”
The opinion of Mr. Justice Day, in the case, is likewise a part of the record in the case at bar. It simply holds that the court nisi, was in error in holding that this ordinance violated complainant’s contract rights, and then reverses the judgment and directs the lower court to dismiss the bill. So that from beginning to end this was the sole question presented, tried and determined. The question as to whether or not the ordinance, as an ordinance, was void because the city had no right to enact it, was never tried in that case. In fact the case there proceeded upon the theory that there was a lawfully enacted ordinance, but that it *495should not be enforced as to complainants, because to so enforce it, would be to violate contract rights. That was the sole question fought out in that case as is evident from the record thereof. It is clearly shown by the assignments of error presented to the United States Supreme Court. It is shown by the admission of counsel in their answer and brief, as above quoted. In fact it is shown by the record from the very date of the filing of the bill of complaint to the opinion of Mr. Justice Day. And we prefer to take these solemn admissions rather than the remarks of counsel, when in desperation they were seeking a reargument of the cause.
We do not think it is seriously contended that any other question was tried and determined in this equitable proceeding in the Federal court. The real contention is that such other questions might have been tried and determined, and for that reason estoppel by judgment is good. There is a general- doctrine, expressed ofttimes in loose language in the cases, that the judgment is conclusive not only as to all matters litigated, but as to all matters which might have been litigated. This is often a misleading statement. In some cases it is true, and in others it is not true. Freeman on Judgments (4 Ed.), vol. 1, p. 441, announces the true rule, thus:
“The general expression, often found in the reports, that a judgment is conclusive of every matter which the parties might have litigated in the action is misleading. What is really meant by this expression is, that a judgment is conclusive upon the issues tendered by the plaintiff’s complaint. It may be that the plaintiff might have united other causes of action with that set out in his complaint, or that the defendant might have interposed counterclaims, cross-bills, and equitable defenses, or either of the parties may have acquired new rights pending the litigation, which might, by permission of the court, have been pleaded *496by supplemental complaint' or answer, and therefore might have been litigated in the action. But as long as these several matters are not tendered as issues in the action, they are not affected by it. Whatever material allegations- the plaintiff makes in his pleadings he must maintain, if they are controverted, and failing to do so, a judgment against him is conclusive of their falsity. The defendant, on his part, must controvert all these allegations which he wishes to gainsay, and failing to do so, their truth is incontestably established as against him. He cannot by failing to deny any of them, or if he denies them, by failing to offer evidence to controvert that offered by plaintiff in support of any of them, successfully claim that it has not been litigated and determined against him. In other words, neither party can decline to meet an issue tendered by the other, and then maintain that it has not become res judicata. The plaintiff must support all the issues necessary to maintain his cause of action. The defendant must bring forward all the defenses which he has to the cause of action asserted in the plaintiff’s pleadings at the time they were filed. In this sense is it true that a judgment is conclusive of every matter which might have been litigated and decided in the action. But the plaintiff is under no obligation to tender issues not necessary to support his cause of action, nor is the defendant required to meet issues not tendered by plaintiff; and, if after the defendant has fully met all the issues tendered by plaintiff, there is any matter not admissible in evidence under the pleadings, it is generally not concluded by the judgment, though the parties might by different pleadings have made it an issue in the action and had it determined.”
In the case in the Federal court complainants were seeking by injunction to prevent the city of St. Louis from enforcing this ordinance against them for the reason that as against them its enforcement would be to *497abrogate pre-existing contracts. They conld only get into a Federal court upon that ground. As said by the author they had a right in their bill to pitch their battle line upon that' question, and need not allege other matters. In this instance they could not well urge a determinative State question without stating themselves out of the Federal court. That the ordinance was void because in conflict with the act of 1901, would be a determinative State question. In discussing this question of res judicata we must not overlook another distinction, which is too often overlooked, by, loose expressions in the cases. Upon the question as to whether all matters which could have, been adjudicated shall be considered as adjudicated upon the plea of res judicata, there is a difference, owing to the class of cases in which the plea is invoked. This doctrine is thus clearly put by the -lamented Mr. Justice Field in the case of Cromwell v. County of Sac, 94 U. S. l. c. 352:
“In considering the operation of this judgment, it should be borne in mind, as stated by counsel, that there is a difference between the effect of a judgment as a bar or estoppel against the prosecution of a second action upon the samé claim or demand, and its effect as an estoppel in another action between the same parties upon a different claim or cause of action. In the former case, the judgment, if rendered upon the merits, constitutes an absolute bar to a subsequent action. It is a finality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose. Thus, for example, a judgment rendered upon a.promissory note is conclusive as to the validity of the instrument and the amount due upon it, although it be subsequently *498alleged that perfect defences actually existed, of which no proof was offered, such as forgery, want of consideration, or payment. If such defences were not presented in the action, and established by competent evidence, the subsequent allegation of their existence is of no legal consequence. The judgment is as conclusive, so far as future proceedings at law are concerned, as though the defenses never existed. The language, therefore, which is so often used, that a judgment es-tops not only as to every ground of recovery or defense actually presented in the action, but also as to every ground which might have been presented, is strictly accurate, when applied to the demand or claim in controversy. Such demand or claim, having passed into judgment, cannot again be brought into litigation between the parties in proceedings at law upon any ground whatever.
“But where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered. In- all eases, therefore, where it is sought to apply the estoppel of a judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry must al- ’ ways be as to the point or question actually litigated and determined in the original action, not what might have been thus litigated and determined. Only upon such matters is the judgment conclusive in another action. ’ ’
In a very recent, case, Owensboro v. Telephone Co., 230 U. S. l. c. 76, the late Mr. Justice Burton thus reannounces the rule:
“The litigation, though between the same parties, is upon an entirely different cause of action. . The bar of the former judgment is, therefore, confined to the questions which were actually litigated and decided in *499the former case, and it devolved upon the city to show, in support of its plea, the cause of action being different in the present case, that the point here in issue was adjudged.in the former case. [De Sollar v. Hanscome, 158 U. S. 216; Virginia-Carolina Chemical Co. v. Kirven, 215 U. S. 252.] ”
The line of distinction is also very clearly drawn in 23 Cyc. 1215 et seq. There it is said:
“A fact or question which was actually and directly in' issue in a former suit, and was there judicially passed upon and determined by a domestic court of competent jurisdiction, is conclusively settled by the judgment therein, so far as concerns the parties to that action and persons in privity with them, and cannot be again litigated in any future action between such parties or privies, in the same court or in any other court of concurrent jurisdiction, upon the same or a different cause of action.”
This rule requires the actual litigation of the question. But there is .a further pronouncement, which draws the distinction for which we contend. The same authority at page 1216 says:
‘ ‘ A former judgment between the same parties is a bar to the maintenance of the second action only when the causes of action in the two suits are identical. But it will be conclusive and final as to any issue litigated and determined in the former suit, and coming again in question in the second suit, although the latter is brought upon an entirely different cause of action.”
To state it briefly, the rule is, that if the two causes of action are the same, or identical, then the judgment in the former is a bar to the latter, and such judgment concludes all matters between the parties which were litigated or which might have been litigated. But on the other hand, if the second suit is a different cause of action, then the former judgment is not a bar to the latter action, but it only precludes the relitigation of questions actually determined in the first suit. In such *500.case questions which might have been determined, but which were not determined, are not barred. Whilst the action here is between the same parties (the parties being reversed) yet the two causes of action are wholly different. The one was an action in equity to restrain the enforcement of an ordinance as against complainants, for reasons stated. The other is a simple action at law to recover a debt alleged to be due per force of an ordinance. That the two are different causes of action cannot be gainsaid. We are all familiar with the usual tests which are applied to determine whether or not we have the same cause of action. Apply these tests to the two causes of action stated, and that they are different is apparent. Now while it is true that a once litigated question cannot be again litigated, between the same parties, although the causes of action may be different, yet when it comes to applying the rule of res judicata to the latter class of eases (cases different -in character) the doctrine that all questions which might have been litigated does not apply. In this class of cases the doctrine that only such questions as were actually litigated in the first case, is the doctrine to be applied. The well reasoned opinion of Mr. Justice Field upon the clearly defined distinction in the application of estoppel by judgment is well bottomed upon authority. The reason is that if the two cases are the same, there is a presumption flowing from the judgment that all questions were litigated. So that we say in the case at bar, that as the two causes of action are and were distinctly different, the rule which permits only actually litigated questions to be considered as have been previously adjudicated, is the rule to be applied here. When the cases relied upon by our brother are considered with this distinction in mind they will, for the most part, be found to be in harmony with these views. We are therefore of the opinion that the alleged former adjudication is not well founded in *501this case. Other matters touching this alleged plea we take later.
Res Adjudicata: Application of Rule: Rule in Federal Courts. Y. Passing now the proposition that a judgment in a former suit is only a bar to all questions involved, or which could have been litigated, is only applicable when the causes of action are identical, and is not a bar as -to questions not actually litigated and determined, where the two causes of action are not identical, we come to another pertinent view of the doctrine of former adjudication. As said before where the two causes of action are identical, then the former judgment is conclusive as to all matters which were actually litigated as well as all matters which could have been litigated in the case, but if the first and second suits are not on the identical cause of action, then the prior judgment is not conclusive except as to such matters as' were actually litigated and determined. [Marble Savings Bank v. Williams, 23 Wash. l. c. 772, citing the opinion of Mr. Justice Field, supra, and many other cases,]
In the case at bar, however, we have another situation. The judgment pleaded in bar, or as estoppel by judgment, is a judgment from a Federal court. In such case the doctrine of res judicata announced by the Federal courts should be the rule which this court should apply to their judgments. In other words, this court cannot give to such a Federal judgment greater effect than would be given to it by the court entering such judgment. Coming down to a period much later than the pronouncement of Mr. Justice Field, supra, we have an announcement of the Federal rule by Mr. Justice Day, the judge who wrote the opinion which directed tide judgment pleaded as an estoppel by judgment in the instant case. In the case of Mayor and Aldermen of the City of Vicksburg v. Henson, Receiver, 231 U. S. 259, l. c. 268, Mr. Justice Day, says:
“Coming to the question whether the former de*502cree disposed of the rights of the parties, as was held in the court below, which judgment was affirmed by the circuit court of appeals, it is undoubtedly true that a right, question or fact put in issue and decided by a court of competent jurisdiction must be taken as settling the rights of the parties in respect to such controversy, and while it remains undisturbed is conclusive between them. The enforcement of this rule has been repeatedly said to be essential to secure the peace and repose of society, and in order that an end may be made of controversies between parties who have once invoked and have had the determination by competent judicial tribunal of the matters in dispute between them. It is no less true that to hold upon any unsubstantial ground that a controversy has been thus concluded is to do an injustice to litigants. We must therefore be careful to see, when the contention of former adjudication is made, that the matter was actually presented and decided, and the rights of the contending parties thereby concluded. We think that an examination of the record m the former case, put in evidence in this case, does not support the contention that the matter here in issue was then adjudicated and determined.”
And upon page 273, the learned justice further says:
“The nature and extent of the former decree is not to be determined by seizing upon isolated parts of it or passages in the opinion considering the rights of the parties, but upon an examination of the issues made and intended to be submitted, and what the decree was really designed to accomplish. We cannot agree with the court below or with the majority of the circuit court of appeals, that the effect of the former adjudication was to preclude the rights of the parties in the present controversy.”
An outline of these two cases will be of interest here. The doctrine for which we contend is clearly *503announced by Mr. Justice Day. We should give Mr. Justice Day's judgment in the instant case no greater virtue than he himself would give it in the Supreme Court of the United States. This court can only give it full faith and credit for just what that court says it is worth.
Now in the Vicksburg case, supra, the facts were these: The city of Vicksburg granted to Bullock & Company the exclusive right to furnish its citizens with water for the period of thirty years. The Vicksburg Water Company succeeded to the rights of Bullock & Company. Later the Legislature of the State of Mississippi empowered the city of Vicksburg to issue bonds for the purpose of constructing or purchasing a waterworks system. Under this legislative authority the city voted $150,000 in bonds for the purchase or construction of city waterworks. At this juncture the Vicksburg Water Company presented its'bill to the Federal court asldng an injunction against the city prohibiting it from constructing a waterworks system of its own during the period of complainant’s contract, i. e., during the period of thirty years from the grant of the right. The decree obtained in the lower court is thus described in Vicksburg v. Waterworks Co., 202 U. S. l. c. 460:
‘ ‘ The decree in the court below was in favor of the Waterworks Company, maintaining its right to the contract for hydrant rentals and enjoined the city, during the period of the contract, from constructing a waterworks system of its own, and requiring the city to construct a sewer for the disposal of house sewage from the city.”
The actual decree in the lower court contained these clauses:
“Fourth. That the said defendant refrain from in any manner accepting the benefits of or proceeding under the act of the Legislature of the State of Mississippi, approved March 9, 1900, and from issuing *504bonds under and by virtue of said act or cmy other act or ordinance for the purpose of erecting waterworks of its own during the period prescribed in said ordinance contract and franchise.
“Fifth. That the said defendant refrain from constructing waterworks of its oivn until the expiration of the period prescribed in the said ordinance contract and franchise dated 18th day of November, 1886.” [Vicksburg v. Henson, 231 U. S. l. c. 268.]
Mr. Justice Day, who wrote the opinion in 202 U. S. 453, affirmed the judgment of the lower court. However, the major portion of his opinion touched upon the question as to whether or not the city could, after granting such a franchise, become a competitor of the waterworks company. Thus stood the judgment which was invoked in bar in the Henson case, supra. Henson was the receiver of the waterworks company. In 1912, before the expiration of the thirty-year franchise (which expired November 18, 1916), the city again was about to sell bonds for the erection of a waterworks system of its own, to be erected forthwith, but not to be used, until the expiration of the franchise. The waterworks company through its receiver again invoked the power of the courts, and this is the case of Vicksburg v. Henson, supra. The lower court held in the Henson case that the city should be enjoined because the matter had been adjudicated in 202 U. S., supra. This judgment Mr. Justice Day, reversed, and in so doing used the language we have quoted above. He says that whilst the actual judgment entered in 202 U. S. enjoined the city from building the waterworks during the franchise period, and whilst the- actual judgment entered in 202 U. S. forbade the city from issuing bonds to build said water system “under the ordinance, or any other ordinance” during the term of the franchise, yet the real question determined in 202 U. S. was whether or not the city itself could become a competitor of the Vicksburg Water *505Company, and that the question as to whether or not the city had the right to build a water system and let it stand until the end of the franchise period was not a litigated question in that case, and therefore not res judicata in the Henson case.
To our mind the Vicksburg case is much stronger in favor of the idea of res judicata than the one at bar. But be that as it may, it is clear under the Federal holdings that there is no res judicata in the instant case upon the question of double taxation, which is a vital question. From start to finish the question of double taxation is not found in the equity case. It is invoked for the first time in the law case. For these reasons the awkwardly pleaded and voluntarily abandoned plea of res judicata cannot be allowed in the instant case.
Res Adjudicata: Things that Might Have Been Litigated. VI. Our learned brother upon the question of res judicata stresses the case of Spratt v. Early, 199 Mo. 491, the opinion in which was written by the writer of this dissent. We desire to take back no part of that opinion. It correctly announces the rule of law in that case, and is not different from the rule for which we contend in this case. In that case the two causes of action were identical. In the first suit Spratt sued Early in equity to set aside a certain deed conveying the property in question on the ground of fraud. This court held that there was no fraud in the making of the deed, because the property was a homestead. This was suit number 1. In suit number 2, in which we wrote the opinion,. Spratt again sued Early, in equity, to set aside for fraud this same deed, in so far as it effected a part of the same land. We then said that the matter of homestead was fully presented by plea and evidence in the former case. In other words the record of the cases showed them to be identical, and in such case the rule is that all matters *506are concluded by the first judgment both, matters litigated and matters which could have and should have been litigated. "We then relied upon the opinion of Brace, J., in Donnell v. Wright, and quoted therefrom. That case was another where there was identity of causes of action. The rule was properly announced therein, but it is not different from what we now urge. Judge Brace took the precaution to note the fact that there were exceptions to the rule he was then stating. He said:
“The plea of res adjudicaba applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.”
This we quoted in Spratt v. Early as the foundation of what we had to say.
The trouble is that our learned brother has failed to observe that the case at bar falls within the exception noted by Judge Brace, and approved by the writer in the Spratt case. If the two causes of action are identical, as they were in both of those Missouri cases, the general rule applies, but if they are not then the case falls within that exception to the general rule, which says that when the two causes of action are not identical,, then only the matters actually litigated and decided can be invoked as estoppels by judgment.
The judgment in this case is an inquitous one under the facts. It is double taxation pure and simple — ■ a doctrine this court has always condemned. The ordinance sustained by the majority opinion should not be sustained as against this defendant, because it is double taxation, a question not seriously discussed in the opinion of our learned brother. We have to do no violence to any well established doctrine of the law to reverse this judgment, which in good conscience *507should not be permitted to stand. No rule of law applicable to the doctrine res judicata is violated by reversing the judgment, even if that question were actually in the case. The judgment should be reversed outright, and we so record our vote.
Bond and Faris, JJ., concur in these views.