tation tax of of 1 per cent on each share of capital stock subscribed to the state of Tennessee, pursuant to the terms of the charter, up to the present time. By virtue of the general revenue laws of the state, the corporation plaintiff in error, or its stockholders, have been taxed upon the capital stock or shares of stock at a greater rate than that provided for in the 60th section of the act of incorporation, and the plaintiffs in error claim that by virtue of that 60th section they are entitled to exemption from all taxation, except that therein provided for. charter it was provided "that said company | the defendant has regularly paid the commushall pay to the state an annual tax or bonus of of 1 per cent on each share of the capital stock subscribed, which shall be in lieu of all other taxes." On the 10th day of December, 1866, the Planters' Insurance Company was incorporated, and thereafter it conducted a general fire insurance business in the city of Memphis up to the year 1885. No immunity from taxation was granted that company. On the 27th day of March, 1885, the name of the Energetic Insurance Company was changed to the Planters' & Marine Insurance Company of Memphis, and the company was authorized to remove its situs and office to the then taxing district of Shelby county, now the city of Memphis. From the time of the passage of the act providing for the incorporation of the Energetic Insurance Company in 1860 down to the 30th day of January, 1884, no action was taken by the incorporators named in the act towards organizing a corporation accepting the charter. On the last-named date a meeting was bad of some of the incorporators, named in the act, and the first minutes which can be found in the office of the defendant corporation, or which it can produce, are the minutes of the incorporators, stockholders, and directors held on that day. Six individuals were named in the original charter as incorporators, together with such other persons as might thereafter be duly associated with them, and at this meeting of the stockholders in January, 1884, four of them were present, and the other incorporators mentioned in the charter were dead at that time. It appears from those minutes that, pursuant to the terms and stipulations of an act of the legislature of Tennessee, a meeting was 195] that day-*January 30, 1884-called of the incorporators of the Energetic Insurance Company of Nashville, and in response to that call four of such incorporators appeared. A moderator was selected and books were opened, or ordered to be opened, for subscriptions to the capital stock of the company, and it was resolved that the first directory should consist of five persons. Stock was then subscribed by the various persons, amounting to $100,000, and the stockholders thus subscribing being present either in person or by proxy, it was unanimously agreed by the incorporators pres ent that the stockholders should go into an election for directors, and that the incorpora tors as such should adjourn. Thereupon, on the same day, it appears from the minutes that a meeting of the stockholders of the company was held and a board of directors elected, and the stockholders then voted to call a meeting of the directors for the same day. A meeting of the directors was then held, and a president,. secretary, and treasurer of the company elected, and from that day (January, 1884) the organization of the corporation plaintiff in error was regular and continuous. After its name was changed by the legislature to the Planters' Fire & Marine Insurance Company, and it was authorized to remove its situs to the city of Memphis, its stock was increased to $150,000, and it removed its place of business to Memphis, and bought out the assets and property of the Planters' Insurance Company and reinsured its risks. Since that time Messrs. T. B. Turley and L. E. Wright for plaintiffs in error. Messrs. S. P. Walker, C. W. Metcalf, and F. T. Edmondson for defendant in error. Mr. Justice Peckham delivered the opinion of the court: The claim set up by plaintiffs in error is that the insurance company was duly incorporated as the Energetic Insurance Company of Nashville, under the act passed March 24, 1860; that it is the same company as therein incorporated, and entitled to all the benefits and immunities, among them that of exemption from taxation granted by that charter. The defendants in error deny that claim, and assert the right to tax by virtue of the general revenue laws of the state. They assert that by reason of the failure to accept the charter and organize thereunder until after the lapse of twenty-four years the corporation did not acquire the right of exemption provided for in the 60th section of the charter because, at the time the company was organized in 1884, the Constitution of the state of Tennessee, adopted in 1870, was in full force, and by that Constitution any exemption of the property of the corporation, its capital stock or its shares of stock, was prohibited. The plaintiffs in error answer that they are either a corporation organized under that charter or else there is no corporation, and the individuals assuming to act as such should be sued in their individual capacity, and if liable at all for any taxes whatever, they must be liable as individuals only. They further say that the state by its action herein recognizes them as a corporation, and if a corporation at all, they are such under the original charter abovementioned, and if they be a corporation under such charter, they are entitled to all the rights and privileges and immunities granted by that charter as a whole, and that they cannot be prosecuted as a corporation under that charter for the purpose of compelling them to *pay taxes and, at the same time, be de- [197 nied the right of exemption from such payment granted by that 60th section. They also allege that this action of the state is a collateral attack upon their charter by denying their immunity from taxation given by the 60th section, and therefore calling in question its existence as a corporation, and an action of that kind can only be maintained by the state by means of a quo warranto, either against the corporation itself for the exercise of powers not granted it, or against the individuals for assuming to exercise the corporate powers. V. CITY OF MEMPHIS, (See 8. C. Reporter's ed. 198-200.) Exemption from taxation. For the purpose of effecting a dissolution of | HOME INSURANCE & TRUST COM. a corporation grounded upon some alleged PANY ET AL., Plffs. in Err., forfeiture of its rights and powers, the state must act through its attorney general and by STATE OF TENNESSEE, for the Use of the action in the nature of quo warrauto. This is not such an action, and the dissolution of the corporation is not its object. The state in effect so far recognizes it as a corporation as to demand payment of taxes on its capital stock or on its shares of stock, and when as a defense to that action the corporation plaintiff in error, or its stockholders, set up its alleged right of exemption under the 60th section of the charter, the answer of the state is: You are not entitled to that exemption because at the time your charter was accepted, twentyfour years after it was granted by the legisla- Argued and Submitted January 20–22, 1896. ture, the Constitution of the state prevented by you, to which the plaintiffs in error rejoin the grant of any exemption such as is claimed that in this action you cannot look at the time when the charter was accepted, but as the corporation is acting under the original charter, the 60th section remains in full force. We think that even in this action it is proper for the state to inquire as to the time of the acceptance of the charter for the purpose of determining what powers were actually granted. If the charter had been accepted and the individuals organized under it prior to the adoption of the Constitution of 1870, then the exemption might have gone with it; but we think it entirely possible to hold that by the acceptance of the charter, assuming it to have been within a reasonable time, but after the Constitution was adopted, such acceptance (while subsequently recognized by the legisla198]ture in permitting it to change its situs) must be taken in connection with the provisions of the Constitution existing at the time, and that while the incorporators might take all the other rights, powers, and privileges granted by the charter, so far as to give them the franchise to be a corporation and exercise the powers therein granted, the immunity of exemption would not pass under the grant. It might possibly have been held, in a direct attack of the state upon the charter, that there had been an unreasonable delay in accepting it, and that consequently there was in law no corporation under the charter. That course was not taken, and the legislature, after the assumed organization under the charter in 1884, passed an act changing the name of the corporation and permitting it to change its situs. It might therefore be claimed that it thereby recognized the existence of the corporation under the charter, but in subordination to the Constitution and laws existing at the time when the charter was accepted. We think upon these facts the exemption from taxation did not pass to the corporation, and the assessments were in consequence legal and valid. The judgment is therefore affirmed. An act giving a corporation all the "powers, rights, reservations, restrictions, and liabilities" of another company does not give an exemption from taxation which the latter may possess. [No. 672.] Decided March 2, 1896. Ntate of Tennessee to review a decree of ERROR to the Supreme Court of the that court in favor of the State of Tennessee for the use of the city of Memphis, plaintiff, against the defendants, the Home Insurance & Trust Company et al., for the recovery of certain taxes. Affirmed. See same case below, 95 Tenn. 212. Statement by Mr. Justice Peckham: The plaintiffs below sought by this bill to recover certain taxes against the Home Insurance Company, or its shareholders, under the general revenue laws of the state, at a greater rate than the plaintiffs in error claimed they are liable to pay. This case was also tried on an agreed statement of facts, by which it appears that on the 29th day of February, 1856, the legislature of Tennessee passed an act in corporating the Home Insurance Company. On March 20, 1858, the legislature passed an act, the 14th section of which provides "that the name of the Home Insurance Company of Memphis be changed to that of the Home Insurance & Trust Company, and said company may organize with all the forms, officers, terms, powers, rights, reservations, restrictions, and liabilities given to and imposed upon the Memphis Life & General Insurance Company, provided nothing herein contained shall in any wise be construed to release said company from any existing liability." The present company organized under this charter. The Memphis Life & General Insurance Company, referred to in the above section, was chartered March 2, 1854, the 30th section of which reads: "That there shall be a state tax of of 1 per cent upon the amount of the capital actually paid in." It is conceded that the Home Insurance Company has regularly paid this tax. The supreme court of NOTE. As to direct taxes, see note to Scholey v. Rew, 23: 99. As to power of states to tax, see note to Dobbins v. Erie County Comrs. 10: 1022. That taxation of stock or shares in corporation (NOTE.-No. 679, by stipulation, is to abide does not impair obligation of contracts; taxation of the event of this cause.) shares of national banks and other corporations, see note to Providence Bank v. Billings, 7: 939. As to exemption from taxation: whether a contract or not; not implied,-see note to Tucker v. Ferguson, 22: 805. 161 U. S. U. S., Book 40. 42 As to when taxes illegally assessed can be recovered back, see note to Erskine v. Van Arsdale, 21: 63. 669 Tennessee held that the shares of stock, the error. Messrs. S. P. Walker, C. W. Metcalf, and F. T. Edmondson for defendant in error. Mr. Justice Peckham delivered the opinion of the court: It is quite questionable whether § 30 of the act incorporating the Memphis Life & General Insurance Company grants to that company an immunity from taxation. Without discussing or deciding that question, however, we think that, assuming the exemption to exist in favor of that company, it did not pass to the Home Insurance Company by virtue of the 14th section of the act of 1858, above quoted. We think the words contained in that section, referring to the Memphis Life & General Insurance Company, are of no broader significance than those referred to in the case of Phoenix F. & M. Ins. Co. v. Tennessee, 161 U. 8. 174 [ante. 660]. Upon authority of that case, therefore, this judgment must be affirmed. ments for the payment of the same, although at the time the certificates are issued the assessments cannot be lawfully made because the title to the lots has passed to a bona fide purchaser. A purchase in good faith at a void sale for nonpayment of assessments upon lots for paving and curbing, when made involuntarily and to protect the interests of the purchaser as the holder of certificates of indebtedness given by the District of Columbia to the contractor who did the work, and the surrender of the certificates for the purchase price of the lots on the sale, will not preclude such holder from recovering the amount paid by him on the sale from the District, as it was through its fault that the sale was void and the lots not subject to a lien for the assessments. [No. 135.] Argued and Submitted December 20, 1895. Decided March 2, 1896. IN ERROR to the Supreme Court of the District of Columbia to review a judgment of that court in favor of plaintiff, Isaac S. Lyon, against the District of Columbia, defendant, for the amount of certificates of indebtedness, and an additional amount paid upon the sale of lots. Affirmed. See same case below, 20 D. C. 484. Statement by Mr. Chief Justice Fuller: This was an action of assumpsit to recover from the District of Columbia the sum of $4,082.70, with interest from October 5, 1881, and was tried, by stipulation, without a jury, by the supreme court of the District of Columbia in general term. Judgment was rendered in plaintiff's favor, March 28, 1892, and thereupon this writ of error was sued out. The HOME INSURANCE & TRUST COMPANY and opinion of the court by James, J., is reported Bunn F. Price, Plffs. in Err., 20 D. C. 484. Under the act of Congress of February 28, 1865 (13 Stat. at L. 434, chap. 48) the corporation of Washington had ample power and authority to make local improvements and to levy and collect taxes to pay for the same. "Be it enacted On November 2, 1869, the corporation of ment in question, as follows: Washington passed an act for the improveThat the mayor be, and he is hereby, authorized and requested to cause the curbstones to be set and the footways and gutters paved on the north side of P street north, between Sixteenth street west and Rock Creek; the work to be contracted for and executed in the manner and under the superintendence provided by law; and to defray the DISTRICT OF COLUMBIA, Piff. in Err., expenses of said improvement, a special tax, V. ISAAC S. LYON. (See S. C. Reporter's ed. 200-208.) Certificates of indebtedness-recovery upon. 1. Certificates of indebtedness are valid obliga tions of the District of Columbia when issued for paving and curbing done under a valid contract with the corporation of Washington, and that corporation and its successor, the District, have failed in the duty to make the required assess NOTE.-A8 to payment voluntary and under protest; when money wrongfully and illegally exacted can be recovered back,-see note to Bank of United States v. Bank of Washington, 8: 299. equal to the cost thereof, is hereby imposed and levied on all lots or parts of lots bordering on the line of the improvement; the said tax to be assessed and collected in conformity with the provisions of the act approved October 12, 1865." Acts 67th Council, chap. 236, p. 116. The act of October 12, 1865, referred to, extended prior acts of May 23 and 24, 1853, to special improvements thereafter made, and provided that the cost and expense of every local improvement, "unless otherwise provided for in the act or acts ordering the same, As to failure of title, how far a defense to purchase price,-see note to Greenleaf v. Cook, 4: 172. As to contracts; their interpretation and validity, -see note to Bell v. Bruen, 11: 89. all legal contracts against said cities, respect 202]shall be levied, assessed, collected, *and | continued for the following purposes, to wit. paid, and the payment thereof enforced," as 'For the collection of all sums of money provided in those acts. Webb, Dig. 360–362. due to said cities respectively; . for The act of May 23, 1853 (Webb, Dig. 155), the enforcement of all contracts made by said provided for proposals for setting curbstones, cities respectively, and all taxes, heretofore etc.; petition for the improvement and plan of assessed, remaining unpaid; for the the property; superintendence by a commis- collection of all just claims against said cities, sioner of improvements with two assistants respectively; for the enforcement of appointed from among those interested in the improvement; that the commissioner of improvements should proceed to execute the work " immediately after the expiration of forty days from the passage of any act laying a tax for the purpose of setting the curbstone and paving the footway on any avenue or street, and according to the proper graduation in front of the lot or lots thereby taxed; and it is hereby understood that the said lot or lots shall alone be answerable for the amount taxed for such improvement," unless the owner shall do the work himself, "in which case the tax laid for the purpose shall become released;" that upon the completion of the work the commissioner "shall deposit with the register a statement exhibiting the cost of setting the curbstone and paving the footway in front of each lot or part of lot separately, and the amount of tax to be paid by each proprietor of said lots or parts of lots, and the register shall then, without delay, place in the bands of the collector of taxes a list of the persons chargeable with such tax, together with the amount due by each person; and the collector shall, within ten days after receiving such list, give notice in writing to each proprietor," to pay within thirty days, and on default collect the tax, with 10 per cent interest, "in the same manner as other taxes upon real property are by law collected;" and that the work should be paid for by certificates of stock, commonly known as "paving stock," issued by the mayor and given to the contractors, and redeemable from time to time as the taxes were collected. None of the provisions of the act of May 24, 1853, are important in connection with this case. The act of June 10, 1867 (Webb, Dig. 467), provided for the appointment of a superintendent and inspector of paving of footways, etc.. and enacted that the said superintendent and 203]*inspector shall also be charged with the duty of making all assessments on lots or parts of lots bordering on any street, alley, or avenue, which shall have been paved." From the agreed statement of facts, supplemented on the hearing below by the addition of a single fact by consent of counsel for both parties, it appeared that one Henry Birch set the curbstone and paved the footway and gutter in front of lots 1 to 12, inclusive, in square 156, under a valid contract executed in 1870 with the corporation of Washington, covering the improvement in front of other lots as well; that the work was duly completed and accepted on or about *November 17, [204 1870, and that its cost, to be paid to Birch, was $2,054.10, no part of which had ever been collected or paid; that the municipal officers failed to comply with the requirements of law relating to assessment and notice; that the superintendent and inspector of paving and footways withheld the statement of the cost of the work from the register and the assessment from record until November, 1871, at "the sole request and procurement of the owner of said lots, whereby he, the owner, was enabled to sell and did sell said lots without any record notice of such assessment, to the purchaser," namely October 2, 1871. In the meantime and after the work was com pleted, the corporation of Washington bad been succeeded by the government of the District of Columbia, and the offices under the corporation of Washington had been abolished, and the superintendent and inspector was without any authority to make the assessment against these lots, yet on or about No. vember, 1871, "the records were erased and altered, whereby an assessment against lots was interpolated over and above the signatures already made of the mayor, ward commissioner, and other officers of the corporation, presumably to make it appear that they had approved the same, when as a matter of fact they had not." A later act on the subject, that of October 28, 1867 (65th Council, chap. 6), provide "that from and after the passage of this act, all taxes assessed on private property for the laying of foot pavements and gutters, curbing and paving alleys, shall be collected It is explained in Lyon v. Alley, 130 U. S. as follows: one fourth of such assessment 177 [32: 899], that the superintendent entered within thirty days after the service of the the work under Birch's contract with the notice by the collector of taxes, and the re- proper proportionate charge against each lot, maining three fourths in three equal annual as to all other lots except those in question, and payments, for which deferred payments it that the change in the record was made by an shall be the duty of the mayor to issue certifi-interlineation in red ink, signed by the officer, cates of indebtedness bearing interest at the rate of 10 per cent per annum." By act of Congress of February 21, 1871 (16 Stat. at L. 428, chap. 62. § 40), it was provided that "the charters of said cities (Washington and Georgetown) severally shall be and reading "Entered November 17, 1870. This work was done at this date, but, by request of the owner, not entered until November, 1871." March 9, 1872, the District of Columbia issued and delivered to Birch four certificates of Mr. Isaac S. Lyon, defendant in error, in person. Mr. Chief Justice Fuller delivered the opinion of the court: indebtedness against these lots for the cost of | for the amount paid by him at the sale, the work, signed by the governor and register, $4,082.70, with interest thereon from October and Birch sold and transferred them to plain-5, 1881. tiff for value before maturity. The certificates stated that there was due from the corporation B. Duvall for plaintiff in error. Messrs. Sidney T. Thomas and Andrew of Washington to Birch and his assigns the sums named, bearing interest from November 17, 1871, at 10 per cent, being issued under the 205] corporation *ordinance of October 28, 1867, for setting the curbstone and paving the footway in front of the lots in question, and that the principal and interest was to be paid "out of the special tax fund, agreeably to the terms of the above recited act.' On June 7, 1874, these lots were advertised for sale by the collector of taxes for nonpayment of the assess ment or certificates, whereupon the sale was enjoined at the instance of the then owner by a temporary restraining order of the court, but neither Birch nor plaintiff were made parties to said cause and neither of them had any knowledge of the order passed therein. The collector of taxes, upon the service of the temporary injunction, made no entry or memorandum thereof against these lots, but by mistake did so as to the same numbered lots in another square. October 5, 1881, the collector of taxes again advertised the lots for sale and sold them for the nonpayment of the assessment or certificates to plaintiff, and there was issued to him, upon his surrendering the certificates, which were canceled, and paying $3 in money, twelve tax sale certificates. At this time, to wit, October 5, 1881, plaintiff had no knowledge whatever of the restraining order or any of the proceedings in the case in which it was granted, and 'neither he nor his assignor, Birch, were aware of any invalid proceedings connected with said assessment, and said purchase was involuntary on the part of plaintiff and made to protect his interest in said certificates of indebtedness and save the same from sacrifice." The certificates of indebtedness thus surrendered were computed and accepted as valid by the District of Columbia at said sale at and for the sum of $4,079.70, which, with $3 paid in cash, made $4,082.70 as the purchase price paid for such lots on October 5, 1881, by this plaintiff." It further appeared that John B. Alley, having become owner of the lots, filed a bill against plaintiff to set aside the tax sale, and that in February, 1885, the supreme court of the Dis trict of Columbia granted the relief prayed (Alley v. Lyon, 3 Mackey, 456), and that its decree was affirmed on appeal (130 U. S. 177 [32: 899]); and it was agreed that "the assessment was illegally levied, and the collector of taxes 206] was without authority and *jurisdiction to sell, and said sale was not made according to law and was void." Plaintiff first learned of the invalid proceedings connected with said assessment and sale in the early part of 1882, and at once made application to defendant for a return of the certificates of indebtedness and the money accepted by the collector of taxes as the purchase price of said lots, tendering in return the certificates of tax sale, but his application was refused. And it was stipulated that if the court should be of opinion that plaintiff was legally entitled to recover, it might give judgment in his favor The supreme court of the District of Columbia held that the effect of the applicable acts "was to charge the municipality, not with a direct indebtedness for the work done under its ordinance, but with the duty to work out a payment therefor by seeing to it that the cost should be charged as a lien upon adjoining lots, and by enforcing this lien and collecting the special tax from the lot owners;" that the District "became invested with authority, and was charged with the duty, to secure such liens and collect and pay over to the contractor such taxes, in payment for work done under an ordinance of the city of Washington. This power could have been exercised and this duty could have been performed in the present case at any time before the 2d day of October, 1871, when it was cut off by the sale of the lots in question to an innocent purchaser:" that "if the resource of payment out of the special tax could have been secured by the District, and was lost *by its omission, a duty to pay the con- [207 tractor would fairly belong to the District, and an issue of certificates of indebtedness to him would not be a void act;" and these certificates were negotiable and were assigned for value to an innocent purchaser; that plaintiff acted in good faith in making the purchase at the tax sale; that the collector did not act as plaintiff's agent for the collection of the certificates, but in the exercise of public functions and for the District, and that as the District had received and retained the proceeds of the transaction, it had treated the sale as made on its account; and, in conclusion, that as the certificates were valid, and between the parties were purchase money, and as the sale gave nothing to the plaintiff, but the District retained and had disabled itself to return the certificates, it was liable for the amount thereof. We concur in these views. The work was done in pursuance of a valid contract, and the city and the District received the benefit thereof. As the city, and then the District, failed to make the required assessments, the District became liable and the certificates of indebtedness were valid obligations. Memphis v. Brown, 87 U. S. 20 Wall. 289, 310, 311 [22: 264, 268]; Hitchcock v. Galveston, 96 U. S. 341 [24: 659]; Chicago v. People, 56 Ill. 327; Kearney v. Covington, 1 Met. (Ky.) 339; Cumming v. Brooklyn, 11 Paige, 596; Reilly v. Albany, 112 N. Y. 30; Fisher v. St. Louis, 44 Mo. 482; Commercial Nat. Bank v. Portland, 24 Or. 188; Cole v. Shreveport, 41 La. Ann. 839; Morgan v. Dubuque, 28 Iowa, 575; Fort Worth City Co. v. Smith Bridge Co. 151 U. S. 294, 302 [38: 167, 170]. The certificates admitted the indebtedness and postponed payment until the amount thereof could be realized from an assessment, which it turned out the District could not then lawfully make, though it could have been done |