Ms,. Justice Field,
after stating the facts, delivered - the opinion of the court.
The principal question for. our determination is whether-the conditional and limited taxation, to which the two original companies first consolidated wer¿ subjected, is extended to the present corporation defendant after its second consolidation.’ As the act of 1856, authorizing the first-consolidation, conferred upon the new corporation “ all the powers, privileges, and immunities ” possessed by each of the consolidating c impanies, and the act of 1873, by reference, adopts'the same provisions, it is contended that the new company is exempt from any other taxation than that to which they were subjected, at -least, that so much of the road of the company as originally belonged to those consolidating companies is thus exempt.
It is not questioned by counsel' on either side that the charter -. of- a private corporation is a contract between the. State and its corporators, and protected under the Constitution of the United
States, like any other - contract, from legislation impairing its obligation. This has'been so often decided, that its statement ' : is only the repetition of an admitted legal principle. The only '■question for serious inquiry, where legislation affecting the'charter is the subject of complaint, is whether it does in fact impair the obligation of the contract; for there may be legislation touching the’ powers of the corporation which will not have that result. Nor is it questioned by counsel that the taxation,..both in its mode and extent, may be so prescribed in the charter as to preclude' any subsequent interference by the ■State with either. . Repeated decisions of this court haye so-adjudged; though the right of one legislature to bind its suc- . cessors in the exercise. of' its power of taxation, which is arr essential attribute of sovereignty, has met with frequent earnest dissent from a minority of the court.
The provision in the charters of the .two original companies was a clear conditional limitation upon the power of the State to. tax them. Language could not be made more direct and . positive. . Only upon the annual net income received from the. - roads of the companies bove the ten per cent paid to the stockholders could a tax be imposed by the State, and then only a portion of such net income could be exacted. “ No other tax,” said the charter, should ever be levied or assessed on the corporations, or any of their privileges or franchises. -So long as these companies were distinct corporations, only the'tax thus prescribed could be imposed upon them. But, when they were merged in the new corporation, their distinct corporate exist- ■ ence ceased, except so far as their existence might- be necessary for the protection of their creditors or mortgagees,..or those of ' the new corporation. The conditions upon which the limitation- of taxation was prescribed could be performed only while, the companies were distinct corporations operating separate lines. Those companies only were required'to keep an account of their disbursements, -expenditures, and receipts, for the ■ inspection of the governor and council, and committees of the legislature. Their treasurers only were bound to render to the-legislature, at the expiration of every year, exhibits under oath of the net profits of their roads'. Their directors only were called upon to make a special report to the legislature,
■whenever their annual income amounted to ten per cent upon the cost and expenses of their roads. It was only upon such .report that the legislature was to determine the portion of the income which should be received in lieu, of other-taxes. The new company . was subject to no such duty of keeping" an account of the expenditures and receipts of the original lines.; its directors were hot called upon to make any report as to the ■income of'-such lines.;-.nor was its treasurer required to make any annual exhibit of the net profits derived from them. The assets of all the companies were intermingled; and continuous trains were, run over the whole length of the several roads. It would have been-impossible to show what would have been the profits of each road without the consolidation. ' Only an approximation to them would have béen attainable; and-that would have been based .upon estimates more.or less speculative in their character.
The consolidation of the original companies was a -voluntary proceeding on their part. The law'made it dependent upon their agreement; and"that law. was presumably passed upon . their request, as they are named in it, and -they acted - under it. Having thus disabled themselves from a compliance with the conditions, upon the performance of which the amount to be •paid as a tax' to the State could be ascertained, they must' be ■.considered as having waived the exemption dependent upon such performance. \ Their exemption, was ’qualified by their duties, and dependent upon them; • They incapacitated themselve.s from the performance of those duties by a proceeding •.which they supposed would give them greater advantages than' they possessed in 'their separate condition, and they thus lost, their exemption. The new.company was not charged with the duties which they were to perform to the Stá¡te, and . by which the State was to be governed in its ^taxation, nor wasthé State under any obligation to accept a substituted performance from' other parties.'
The provision in the act authorizing the consolidation, that the new company should have all the powers, privileges, and immunities of the original companies, must, therefore, be taken ' with the qualification that it should h’áye' them so far as they-could be exercised or enjoyed by it, with its different officers'
and distinct constitution. Where their exercise or enjoyment required other officers or a different constitution, the grant was to that extent necessarily inoperative.
The Maine Central Railroad Company was, upon the consolidation. of the original companies, a new corporation, as distinct from them as though it had been created before their existence. The fact that the powers, privileges, and immuni-' ties which they had-possessed were conferred upon the new-company, so far as they could be exercised or enjoyed by it, in no respect affected its character as a distinct .body. A new •corporation may be .as readily created by the union of two or more corporations as by the • union of individualsand its ■ .powers and privileges may as well be designated by reference to the charters of other companies as by special enumeration.
It follows that' the limitation ,of the taxing power of the State to á portion, of their net income-prescribed in the charters of the old companies ceased upon their consolidation into the Maine Central. When this new company came into existence, it became subject to the. provisions of the general law of 1881, which declared that .any act of inqorporation. subsequently passed should at all times thereafter “ be liable to. be amended, altered,.Or repealed,.at the pleasure of the legislature, in the same manner as if an express provision to that effect were therein contained, unless there shall have been inserted in such act of incorporation an express limitation or provision to the5 contrary.” .
Free access — add to your briefcase to read the full text and ask questions with AI
Ms,. Justice Field,
after stating the facts, delivered - the opinion of the court.
The principal question for. our determination is whether-the conditional and limited taxation, to which the two original companies first consolidated wer¿ subjected, is extended to the present corporation defendant after its second consolidation.’ As the act of 1856, authorizing the first-consolidation, conferred upon the new corporation “ all the powers, privileges, and immunities ” possessed by each of the consolidating c impanies, and the act of 1873, by reference, adopts'the same provisions, it is contended that the new company is exempt from any other taxation than that to which they were subjected, at -least, that so much of the road of the company as originally belonged to those consolidating companies is thus exempt.
It is not questioned by counsel' on either side that the charter -. of- a private corporation is a contract between the. State and its corporators, and protected under the Constitution of the United
States, like any other - contract, from legislation impairing its obligation. This has'been so often decided, that its statement ' : is only the repetition of an admitted legal principle. The only '■question for serious inquiry, where legislation affecting the'charter is the subject of complaint, is whether it does in fact impair the obligation of the contract; for there may be legislation touching the’ powers of the corporation which will not have that result. Nor is it questioned by counsel that the taxation,..both in its mode and extent, may be so prescribed in the charter as to preclude' any subsequent interference by the ■State with either. . Repeated decisions of this court haye so-adjudged; though the right of one legislature to bind its suc- . cessors in the exercise. of' its power of taxation, which is arr essential attribute of sovereignty, has met with frequent earnest dissent from a minority of the court.
The provision in the charters of the .two original companies was a clear conditional limitation upon the power of the State to. tax them. Language could not be made more direct and . positive. . Only upon the annual net income received from the. - roads of the companies bove the ten per cent paid to the stockholders could a tax be imposed by the State, and then only a portion of such net income could be exacted. “ No other tax,” said the charter, should ever be levied or assessed on the corporations, or any of their privileges or franchises. -So long as these companies were distinct corporations, only the'tax thus prescribed could be imposed upon them. But, when they were merged in the new corporation, their distinct corporate exist- ■ ence ceased, except so far as their existence might- be necessary for the protection of their creditors or mortgagees,..or those of ' the new corporation. The conditions upon which the limitation- of taxation was prescribed could be performed only while, the companies were distinct corporations operating separate lines. Those companies only were required'to keep an account of their disbursements, -expenditures, and receipts, for the ■ inspection of the governor and council, and committees of the legislature. Their treasurers only were bound to render to the-legislature, at the expiration of every year, exhibits under oath of the net profits of their roads'. Their directors only were called upon to make a special report to the legislature,
■whenever their annual income amounted to ten per cent upon the cost and expenses of their roads. It was only upon such .report that the legislature was to determine the portion of the income which should be received in lieu, of other-taxes. The new company . was subject to no such duty of keeping" an account of the expenditures and receipts of the original lines.; its directors were hot called upon to make any report as to the ■income of'-such lines.;-.nor was its treasurer required to make any annual exhibit of the net profits derived from them. The assets of all the companies were intermingled; and continuous trains were, run over the whole length of the several roads. It would have been-impossible to show what would have been the profits of each road without the consolidation. ' Only an approximation to them would have béen attainable; and-that would have been based .upon estimates more.or less speculative in their character.
The consolidation of the original companies was a -voluntary proceeding on their part. The law'made it dependent upon their agreement; and"that law. was presumably passed upon . their request, as they are named in it, and -they acted - under it. Having thus disabled themselves from a compliance with the conditions, upon the performance of which the amount to be •paid as a tax' to the State could be ascertained, they must' be ■.considered as having waived the exemption dependent upon such performance. \ Their exemption, was ’qualified by their duties, and dependent upon them; • They incapacitated themselve.s from the performance of those duties by a proceeding •.which they supposed would give them greater advantages than' they possessed in 'their separate condition, and they thus lost, their exemption. The new.company was not charged with the duties which they were to perform to the Stá¡te, and . by which the State was to be governed in its ^taxation, nor wasthé State under any obligation to accept a substituted performance from' other parties.'
The provision in the act authorizing the consolidation, that the new company should have all the powers, privileges, and immunities of the original companies, must, therefore, be taken ' with the qualification that it should h’áye' them so far as they-could be exercised or enjoyed by it, with its different officers'
and distinct constitution. Where their exercise or enjoyment required other officers or a different constitution, the grant was to that extent necessarily inoperative.
The Maine Central Railroad Company was, upon the consolidation. of the original companies, a new corporation, as distinct from them as though it had been created before their existence. The fact that the powers, privileges, and immuni-' ties which they had-possessed were conferred upon the new-company, so far as they could be exercised or enjoyed by it, in no respect affected its character as a distinct .body. A new •corporation may be .as readily created by the union of two or more corporations as by the • union of individualsand its ■ .powers and privileges may as well be designated by reference to the charters of other companies as by special enumeration.
It follows that' the limitation ,of the taxing power of the State to á portion, of their net income-prescribed in the charters of the old companies ceased upon their consolidation into the Maine Central. When this new company came into existence, it became subject to the. provisions of the general law of 1881, which declared that .any act of inqorporation. subsequently passed should at all times thereafter “ be liable to. be amended, altered,.Or repealed,.at the pleasure of the legislature, in the same manner as if an express provision to that effect were therein contained, unless there shall have been inserted in such act of incorporation an express limitation or provision to the5 contrary.” . .Although this provision-could not bind any succeed-' .ing legislature which might choose to disregard it, so long as it remained unrepealed, subsequent legislation not repugnant to it was controlled by it, and must be .construed and enforced in connection with it. There was no ’ limitation in the act authorizing the consolidation; which was the act of incorporation of the new company, upon the legislative power of amendment and alteration, and,"of course,'there was none upon the extent or mode of taxation which might be subsequently adopted. By the reservation in the law of 1831, which is to' be considered as if embodied in- that act, the State retained the power to alter it in all particulars constituting the grant to the new company, formed under it, of corporate rights, privb leges, and immunities. The existence of the corporation, and
its franchises and immunities, derived directly from the' State,, were thus kept under its control. Rights and-interests acquired by the company, not constituting a part of the contract of incorporation, stynd upon a different' footing. But' no such' rights, or interests are here inyolved.
New Jersey
v.
Yard,
95 U. S. 104;
Tomlinson
v.
Jessup,
15 Wall. 454.
• The several cates cited by counsel from the decisions of this court, upon, the effect of consolidating several companies where some of them possess an immunity from taxation, do not mili-, tate against the yiews here expressed. They are
The Delaware Railroad Tax,
18 Wall. 206;
Central Railroad & Banking Co.
v.
Georgia,
92 U. S. 665; and
Chesapeake Ohio Railroad Co.
v.
Virginia,
94 U. S. 718. In the Delaware Railroad Tax Case, it appeared that three companies — one of which owned a railroad in Pennsylvania, one a railroad in Maryland,- and one a railroad in Delaware — were consolidated into one company under the legislation of those States. The act of the legislature of Delaware declared that the. respective companies should constitute one cómpany, and be entitled to all the rights, privileges, and- immunities which each -. and ali of them possessed and enjoyed under their l’espective charters-; and one 'of those charters, which was granted by Maryland, had exempted the shares of the capital stock of its company from taxation. It was held that the provision in the Delaware act in no respect affected its power of, taxation upon- the property of the new company in that State; that the new company, stood in each State as the original company had previously stood in that State, invested with the same rights and subject to the same liabilities; and that it was not the intention of', either State -to enforce within its limits the legislation' of the other.- This decision has no bearing upon the .questions involved in the present case.
In
Central Railroad & Banking Co.
v.
Georgia, it
was held that the consolidation of two railroad companies did not necessarily work a dissolution of both and the creation of a new .corporation; that whether such would be its effect depended upon the legislative intent manifested in ,the statute under which the consolidation took place; that, in the case under consideration, the two companies there mentioned were
not dissolved by their consolidation; • that the consolidated company continued to possess all the rights and' immunities which were conferred upon each company by its original charter; and, inasmuch, as One of the companies was exempted from liability to any greater tax than one-half of one .per cent of its net annual income, the exemption continued after the consolidation : The State, in'that case, claimed that a new Oompany ■was- the result of the' consolidation, and that its charter was •then subject to' repeal or modification, at the. will of the legislature. The court replied, that if the charter of the company having the exemption had been surrendered, and a new corporation created by the consolidation, the consequences claimed ■ by the State “ might' and probably would follow.” . There is nothing in this decision which touches the case at bar.
In
Chesapeake & Ohio Railroad Co.
v. Virginia, it was held that a railroad corporation, formed under an act of the legislature by the consolidation of existing companies, and “ vested with all the rights, privileges, franchise, and property which may have been vested in either company prior to the act of consolidation,”' acquired no greater .immunity from taxation than had. been severally enjoyed by the original' companies as to the portions of the road belonging to them, and that whatever property had been subject to taxation. previous to the consolidation remained so afterwards. This decision has no application to the questions involved in the cáse before us. In none of these eases were duties required of the original companies and their directors and officers, which could not have been equally discharged by the new companies, .nor was the extent or mode of taxation made dependent upon information to be imparted by officers who, upon the consolidation- of the companies, had ceased to exist.
■ We'have in this opinion made no reference'to the charters of 'the. three railroad companies which were consolidated with the Maine Central Company in 18741 It it .admitted that the charters of two of them contained no limitation upon the tax- ' jng power of the State, Ivhe third company, incorporated in 1886, obtained; by án act passed in 1845, a conditional- exemption from .taxation, like that, in the charters of the two'companies in the'first.consolidation. Á mortgage upon its road and
franchise' was, .in 1862, foreclosed by the mortgagees, who acquired the property and formed a new corporation.. This new corporation was, by the statute which authorized it, declared invested with the legal rights and immunities of the original corporation. When it afterwards consolidated with the Maine Central, its rights and immunities passed to that company, only to the extent and subject to the same limitations as those of the original two companies...
It follows, that there is no error in the judgment of the Supreme Court of Maine; and it is, therefore, .
Affirmed.
Mr. Justice Strong dissented.