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to be applied by them in the same manner i ly all property within the territorial limits as moneys received on account of rentals of a state is subject to its taxing power. and leases;” second, in chap. 19 of the Laws Whoever insists that any particular propof 1871, which, granting the privilege of ocerty is not so subject has the burden of cupying certain streets with street railroad proof, and must make it entirely clear that, tracks, provided that the company should by contract or otherwise, the property is "make compensation to the mayor, alder- beyond its reach. In Providence Bank v. men, and commonalty of said city of New Billings, 4 Pet. 514, 7 L. ed. 939, Mr. Chief York for the value of the rights and privi- Justice Marshall, in delivering the opinion leges herein granted or authorized," and of the court, said (p. 561, L. ed. p. 955): also prescribed the mode of ascertaining "That the taxing power is of vital imthat compensation by three commissioners, portance, that it is essential to the existwhose decision should be final and concluence of government, are truths which it sive as to the company and the mayor, al cannot be necessary to reaffirm. They are dermen, and coinmonalty of said city, add acknowledged and asserted by all. It would ing “the amount so fixed and determined seem that the relinquishment of such a shall be paid to the commissioners of the power is never to be assumed. We will not sinking fund of said city, by the said com- say that a state may not relinquish it, that pany, within thirty days after the same be a consideration sufficiently valuable to incomes payable, according to the decision duce a partial release of it may not exist; aforesaid, and applied to the reduction of but, as the whole community is interested the debt of said city;" third, in chap. 508 in retaining it undiminished, that commuof the Laws of 1874, which granted the nity has a right to insist that its abandonright to "construct, operate, maintain, and ment ought not to be presumed in a case use railways" in certain streets in the city in which the deliberate purpose of the state of New York, and provided that “the said to abandon it does not appear.” persons, or their assigns, shall annually, In Vicksburg, 8. & P. R. Co. v. Dennis, on the first day of November, pay into the 116 U. S. 665, 29 L. ed. 770, 6 Sup. Ct. Rep. treasury of the city of New York 1 per cent 625, Mr. Justice Gray cited many authoriof the gross receipts of the road herein pro- ties, quoting the different phraseology in vided for, the amount of which gross re- which, by the several writers of the opinceipts shall be determined by the sworn ions, the same rule was announced. In statement of the president and treasurer of Wells v. Savannah, 181 U. S. 531, 45 L. ed. said railway, but subject to the inspection 986, 21 Sup. Ct. Rep. 697, the law was thus of its books by the comptroller of the city stated by Mr. Justice Peckham (p. 539, L. of New York."

ed. p. 991, Sup. Ct. Rep. p. 700): Subsequent to the law of 1884, above re- “The payment of taxes on account of ferred to, fifteen other franchises now be property otherwise liable to taxation can longing to the relator were granted by the only be avoided by clear proof of a valid common council of the city of New York. contract of exemption from such payment; Most of them provided for annual payment and the validity of such contract presupto the city of New York of either a fixed poses a good consideration therefor. If the amount or a fixed percentage, varying from property be, in its nature, taxable, the con2 to 8 per cent of the gross earnings. tract exempting it from taxation must, as

we have said, be clearly proved. It will not Messrs. William D. Guthrie and Elihu be inferred from facts which do not lead Root for plaintiff in error.

irresistibly and necessarily to the existence Messrs. Julius M. Mayer and Louis of the contract. The facts proved must Marshall for defendant in error.

show either a contract expressed in terms,

or else it must be implied from facts which Mr. Justice Brewer delivered the opin- leave no room for doubt that such was the ion of the court:

intention of the parties, and that a valid The decision of the court of appeals set consideration existed for the contract. If tles that there is nothing in the law or the there be any doubt on these matters, the proceedings in this case in conflict with the contract has not been proven, and the exConstitution of that state. It is not con- emption does not exist." tended by the plaintiff in error that there In Chicago Theological Seminary v. Illiis any constitutional objection to the taxa- nois, 188 U. S. 662, 47 L. ed. 641, 23 Sup. tion of franchises. The right to subject Ct. Rep. 386, the same Justice declared them to a share in the burden of supporting (p. 672, L. ed. p. 648, Sup. Ct. Rep. p. 387): the government is conceded.

“The rule is that, in claims for exempThe main contention is that this tax leg- tion from taxation under legislative auislation impairs the obligation of contracts, thority, the exemption must be plainly and It must be borne in mind that presumptive-' unmistakably granted; it cannot exist by

or

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implication only; a doubt is fatal to the to be observed by the holders of the priviclaim.”

lege, such as payment of a license fee, of See also Erie R. Co. v. Pennsylvania, 21 a gross sum down, of a specific sum Wall. 492, 22 L. ed. 595; Wilmington & w. each year, certain percentage of R. Co. v. Alsbrook, 146 U. S. 279, 36 L. receipts, as a consideration, or 'in full sated. 972, 13 Sup. Ct. Rep. 72; Ford v. Delta isfaction for the use of the streets. There & P. Land Co. 164 U. S. 662, 41 L. ed. 590, is no provision that the special franchise, 17 Sup. Ct. Rep. 230.

or the property created by the grant, shall This rule is akin to, if not part of, the be exempt from taxation. broad proposition, now universally accept- “The condition upon which a franchise is ed, that in grants from the public nothing granted is the purchase price of the grant, passes by implication. As said by Mr. Chief the payment of which in money, or by Justice Taney, in Charles River Bridge v. agreement to bear some burden, brought the Warren Bridge, 11 Pet. 420, 549, 9 L. ed. property into existence, which thereupon be773, 824:

came taxable at the will of the legislature, “The inquiry, then, is, Does the charter the same as land granted or leased by the contain such a contract on the part of the state. There is no implied covenant that state? Is there any such stipulation to be property sold by the state cannot be taxed found in that instrument? It must be ad-by the state, which can even tax its own mitted on all hands that there is none,—no bonds, given to borrow money for its own words that even relate to another bridge, use, unless they contain an express stipuor to the diminution of their tolls, or to lation of exemption. The rule of strict conthe line of travel. If a contract on that struction applies to state grants, and unless subject can be gathered from the charter, there is an express stipulation not to tax, it must be by implication, and cannot be the right is reserved as an attribute of sovfound in the words used. Can such an ereignty. Special franchises were not taxed agreement be implied? The rule of con- until, by the act of 1899, amending the tax struction before stated is an answer to the law, they were added to the other taxable question. In charters of this description no property of the state. This is all that the rights are taken from the public or given statute does, so far as the question now to the corporation beyond those which the under consideration is concerned. No part words of the charter, by their natural and of the grant is changed, no stipulation proper construction, purport to convey. altered, no payment increased, and nothing There are no words which import such a exacted from the owner of the franchise contract as the plaintiffs in error contenu that is not exacted from the owners of propfor, and none can be implied.”

erty generally. No blow is struck at the Applying these well-established rules to franchise, as such, for it remains with every the several contracts, it will be perceived right conferred in full force; but, as it is that there was no express relinquishment property, it is required to contribute its of the right of taxation. The plaintiff in ratable share, dependent only upon value, error must rely upon some implication, and toward the support of government." not upon any direct stipulation. In each It would not be doubted that, if a grant contract there was a grant of privileges, was of specific. tangible property, like a but the grant was specifically of privileges tract of land, and the payment therefor was in respect to the construction, operation, a gross sum, no implication of an exempand maintenance of a a street railroad. tion from taxation would arise. Whether These were all that, in terms, were grant- the amount paid was large or small, greater ed. As consideration for this grant the or less than the real value, if the payment grantees were to pay something, and such was distinctly the consideration of a grant, payment is nowhere said to be in lieu of that which was granted would pass into the or as an equivalent or substitute for taxes. bulk of private property, and, like all other All that can be extracted from the language such property, be subject to taxation. Nor used was a grant of privileges and a pay- would this result be altered by the fact that ment therefor. Other words must be writ- the payment for the thing granted was to be ten into the contract before there can be made annually instead of by a single sum found any relinquishment of the power of in gross. If it was real estate it would be taxation.

equivalent to the conveyance of the tract In the well-considered opinion of the subject to ground rent, and the grantee takcourt of appeals in this case it was stated ing the title would hold it liable to taxation by Mr. Justice Vann:

upon its value. If this be true in reference “The franchises are grants which usually to a grant of tangible property, it is equally contain contracts, executed by the munici- true in respect to a grant of a franchise, pality, but executory as to the owner. They for a franchise, though intangible, is none contain various conditions and stipulations' the less property, and oftentimes property of great value. Indeed, growing out of the pose any further tax upon the franchise. conditions of modern business, a large pro- But why, when bought, as it becomes propportion of valuable property is to be founderty, may it not be taxed as land is taxed in intangible things like franchises. We which has been bought from the state? had occasion to review this subject in was repeatedly asked in the course of the Adams Exp. Co. v. Ohio, 166 U. S. 185, 41 argument. The reason is, that everyone L. ed. 965, 17 Sup. Ct. Rep. 604, where we buys land, subject, in his own apprehension, said (pp. 218, 219, L. ed. pp. 976, 977, Sup. to the great law of necessity, that we must Ct. Rep. p. 605):

contribute from it and all of our property "In the complex civilization of to-day a something to maintain the state. But a large portion of the wealth of a community franchise for banking, when bought, the consists in intangible property, and there is price is paid for the use of the privilege nothing in the nature of things or in the whilst it lasts, and any tax upon it would limitations of the Federal Constitution substantially be an addition to the price.” which restrains a state from taxing at its

But there was in that case an express real value such intangible property.

exemption from taxation, in these words: It matters not in what this intangible prop

“And be it enacted, that, upon any of erty consists,—whether privileges, corpo- the aforesaid banks accepting and complyrate franchises, contracts, or obligations. It ing with the terms and conditions of this is enough that it is property which, though act, the faith of the state is hereby pledged intangible, exists, which has value, produces not to impose any further tax or burden income, and passes current in the markets upon them during the continuance of their of the world. To ignore this intangible charters under this act.' property, or to hold that it is not subject to There being thus an express stipulation taxation at its accepted value, is to elimi- on the part of a state not to impose any nate from the reach of the taxing power a further tax or burden, the question decided large portion of the wealth of the country.” was really the extent of the exemption, and

In State Railroad Tas Cases, 92 U. S. it was held to apply not merely to the fran575, 603, 23 L. ed. 663, 669, is this lan- chise, but to the property of the bank. The guage by Mr. Justice Miller, speaking for statements of Mr. Justice Wayne were only the court:

by way of argument to support the conclu“That the franchise, capital stock, busi- sion that the exemption went beyond the ness, and profits of all corporations are lia- franchise alone. Furthermore, that case has ble to taxation in the place where they do been repeatedly qualified and limited by business, and by the state which creates subsequent decisions. In New Orleans City them, admits of no dispute at this day. & Lake R. Co. v. New Orleans, 143 U. S. 'Nothing can be more certain in legal deci- 192, 36 L. ed. 121, 12 Sup. Ct. Rep. 406, sions,' says this court in Society for Sav- Mr. Justice Gray, speaking for the court, ings v. Coite, 6 Wall. 607, 18 L. ed. 903, said (p. 195, L. ed. p. 122, Sup. Ct. Rep. 'than that the privileges and franchises of a p. 406): private corporation, and all trades and “Exemption from taxation is never to be avocations by which the citizens acquire a presumed. The legislature itself cannot be livelihood, may be taxed by a state for the held to have intended to surrender the taxsupport of state government. State ing power, unless its intention to do so has Freight Tax Case (Philadelphia & R. R. been declared in clear and unmistakable Co. v. Pennsylvaniu), 15 Wall. 232, 21 L. words. Vicksburg, S. & P. R. Co. v. Dennis, ed. 146; State Tax on Gross Receipts (Phil- 116 U. S. 665, 29 L. ed. 770, 6 Sup. Ct. adelphia & R. R. Co. v. Pennsylvania), 15 Rep. 625, and cases cited. Assuming, withWall. 284, 21 L. ed. 164."

out deciding, that the city of New Orleans It is urged that when the public grants was authorized to exempt the New Orleans a privilege on condition of the payment of City Railroad Company from taxation unan annual sum the contract implies that der general laws of the state, the contract the public shall exact no larger amount for between them affords no evidence of an inthat privilege, that to impose a tax is sim- tention to do so. The franchise to build and ply increasing the price which the grantee run a street railway was as much subject is called upon to pay for the privilege, and to taxation as any other property. In Gordon v. Appeal Tax Court, 3 How. 133, Gordon v. Appeal Tax Court, 3 How. 133, 11 L. ed. 529, is relied upon as authority. 11 L. ed. 529, upon which the plaintiff in It is true, in the opinion of the court, an- error much relied, the only point decided nounced by Mr. Justice Wayne, is this lan was that an act of the legislature continuguage (p. 145, L. ed. p. 535):

ing the charter of a bank, upon condition "Such a contract is a limitation upon that the corporation should pay certain the taxing power of the legislature making sums annually for public purposes, and deit, and upon succeeding legislatures, to im-'claring that, upon its accepting and com

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plying with the provisions of the act, the him, a holder of property within the city; faith of the state was pledged not to im- and the city council was authorized to pose any further tax or burden upon the make assessments only upon the inhabitcorporation during the continuance of the ants of Charleston, or those holding taxcharter, exempted the stockholders from tax- able property within the same.” ation on their stock; and so much of the

Chicago v. Sheldon, 9 Wall. 50, 19 L. ed. opinion as might, taken by itself, seem to 594, is also not in point. An ordinance support this writ of error, has been often

was passed by the city council of Chicago explained or disapproved. Piqua Branch of prescribing the amount of work which a State Bank v. Knoop, 16 How. 369, 386, street railway company must do in the 401, 402, 14 L. ed. 977, 984, 990, 991; New York v. Tax & A. Comrs. 4 Wall. 244, 259, grading, paving, etc., of the streets on which 18 L. ed. 344, 350; Jefferson Branch Bank v.

its railway was authorized to be constructSkelly, 1 Black, 436, 446, 17 L. ed. 173, 178; ed. The company, having accepted, and comFarrington v. Tennessee, 95 U. S. 679, 690, plied with the terms of this ordinance, the 694, 24 L. ed. 558, 561, 562; Stone v. city attempted by assessments for special Farmers' Loan & Trust Co. 116 U. S. 307, | improvements to compel the railway com328, 29 L. ed. 636, 643, 6 Sup. Ct. Rep. 334, pany to pay for further work of the nature 388, 1191. The case at bar cannot be dis required by the original ordinance, and it tinguished from that of Memphis Gaslight was held that the obligations assumed by Co. v. Taxing Dist., in which this court up- the railway company in respect to street held a license tax upon a corporation which improvements, as provided by the ordihad acquired by its charter the privilege of nance, could not be increased by special erecting gas works and making and selling assessments

for

further improvements. gas for fifty years; and, speaking by Mr. But this involved no question of liability Justice Miller, said: "The argument of coun- to general taxation, and only held void the sel is that if no express contract against tax effort of the city, under the guise of special ation can be found here it must be implied, assessments, to increase the obligations because to permit the state to tax this com- specifically assumed by the railway company by a license tax for the privilege grant- pany under the original ordinance. ed by its charter is to destroy that privilege. But the answer is that the company took 'L. ed. 352, there was a contract that a cer

In New Jersey v. Yard, 95 U. S. 104, 24 their charter subject to the same right of taxation in the state that applies to all tain tax should “be in lieu and satisfaction other privileges and to all other property. ever, by or under the authority of this

of all other taxation or imposition whatsoIf they wished or intended to have an exemption of any kind from taxation, or state, or any law thereof,” and the decision felt that it was necessary to the profitable simply upheld that exemption specifically working of their business, they should have contracted for.

It is further contended that there has required a provision to that effect in their charter. The Constitution of the United been a recognition and practical construcStates does not profess in all cases to pro- tion in respect to the grants of these frantect property from unjust and oppressive chises, and on these grounds: First, no attaxation by the states. That is left to the tempt has been made to legislate in respect state Constitutions and state laws.' 109 to their taxation until 1899, although some U. S. 398, 400, 27 L. ed. 976, 977, 3 Sup. of them had been in existence for many Ct. Rep. 205, 206."

years; second, Governor Cleveland, in one Murray v. Charleston, 96 U. S. 432, 24 of his messages, called the amount required L. ed. 760, is not in point. The city of to be paid by the contract a tax, and GoverCharleston, having issued bonds, subse- nor Roosevelt also spoke of existing “taxes;” quently passed an ordinance assessing a third, § 46 of the legislation authorizing the tax upon all real and personal property in tax upon these franchises provided that "any the city, and directed the treasurer to re- sum based upon a percentage of gross tain out of the interest due on those bonds earnings, or any other income, or any the amount of the tax. Murray was a resi- license fee, or any sum of money on account dent of Germany, and resisted the re- of such special franchise, granted to or duction of interest, and it was held that possessed by such person, copartnership, asthe city could not, by way of a tax, reduce sociation, or corporation, which payment the amount of the interest which it had was in the nature of a tax, all amounts so promised to pay to this nonresident holder, paid for the exclusive use of such city, the court saying in its opinion (p 440, L. town, or village, except money paid or exed. p. 761): “A nonresident creditor can- pended for paving or repairing of pavement not be said to be, in virtue of a debt due to 'of any street, highway, or public place, shall be deducted from any tax based on the The quotation from the court of appeals assessment made by the state board of tax must be interpreted in the light of the quescommissioners for city, town, or village tion presented. That was whether the appurposes, but not otherwise; and the re- pellee company was entitled to avail itself mainder shall be the tax on such special of the provision of § 46 just quoted, it havfranchise payable for city, town, or village ing been required by its charter to pay a purposes;" fourth, the court of appeals of certain percentage of its gross receipts. It New York in Heerwagen v. Crosstown was held that it was so entitled, and the Street R. Co. 179 N. Y. 99, 104, 71 N. E. argument was to show that the words "in 729, 730, said:

the nature of a tax” were used in a broad “In the first place, both in statutes and and comprehensive sense to include a payin judicial decisions, the term 'tax' is ment made on account of the privilege grantfrequently used in a much more compre- ed. No question was made or considered as hensive sense than that which we have to the liability of the company to the tax stated to be its accurate meaning. It is on its franchise. Its only claim was to the not used so broadly as to include the deduction on account of the percentage of revenue from private property which the its receipts already paid. The court, in adstate or one of its political divisions may dition to the language quoted, said (p. 106, hold for emolument, the same as other N. E. p. 731): owners; but it certainly is used to compre- “The statute in question was enacted at hend exactions for the privilege of exer- a special session of the legislature convened cising franchise rights, which latter are by the governor for that purpose. In his often, especially in the case of foreign message to the legislature he recommended corporations, merely the consideration re- that 'it should be provided that from the ceived for privileges which the state is at sum assessed by the state authorities as the liberty to grant or to withhold at pleasure.” tax which a corporation must pay because

We are not disposed to undervalue the of its local franchise there shall be deducted force of these suggestions, but it would be the amount already annually paid by it to giving them undue significance to hold that the locality for such franchise. In no other they are potent to displace the power of the way is it possible to tax these corporations state to subject to the burdens of taxation with uniformity and equity.' It may be that property within its limits. The word “tax” this view is erroneous, and that the more is not infrequently used in a general sense accurate and equitable way would be to deas denoting a burden or charge, and not in termine the value of the franchise, not as the strict legal sense of the charge or burden free and clear, but as burdened by the imposed by the state for the purposes of charges to which it might be subject. Neverrevenue for its support. Undoubtedly the theless, it is plain that this view was acpayment for the franchise of an annual sum cepted by the legislature, for under the was a burden, and in that sense it might scheme provided by the present statute the not unnaturally have been spoken of as a franchise is to be assessed as real estate; tax. Being recognized as a burden, it may that is to say, not subject to diminution for also well be that when the franchise itself charges thereon, and the allowance for such was of comparatively little value the legis- charges is made only by deducting them lature did not see fit to subject it to the bur- from the tax.” dens of ordinary taxation. But the omission We are of opinion that no contract right of one legislature or a dozen legislatures does of the relator was impaired by the legisnot destroy the power of the state. The lation in question. language quoted from § 46 indicates the It is further insisted that the special desire of the legislature to deal equitably franchise tax law denies the relator the with the corporations holding these fran- equal protection of the laws and due process chises. Surely the manifestation of this in three separate and distinct aspects, desire cannot be construed into a repudia- “namely: (1) in that it adds to the oblition of power. These annual charges are not gations of their various contracts while precalled taxes, but are spoken of as in the serving all the burdens of those contracts; nature of a tax; and the legislature, recog- (2) in that it provides for the deduction of nizing the equitable force of the claim based annual payments covered by existing conthereon, provided that the corporation be tracts from the amount of tax levied, by given credit for sums thus payable. In this reason of which deduction those who agreed connection it is well to recall that in $ 1 of to pay for their franchises lump sums or the act of 1886, supra, these annual charges annual amounts less than the new tax are are called "rental or percentage of gross discriminated against; and (3) in that it earnings."

discriminates against them and subjects

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