Trippe, Judge.
By the act of October 24th, 1870, .the state proposed .to lease the Western and Atlantic Railroad for twenty years, for a sum not less than $25,000 00 per month, payable monthly. The lessees were to give bond in the sum of $8,000,000 00 for the performance of their-contract, and for the returñ of the road and its appurtenances at the expiration of the lease, in as good condition as when received by them. The lessees were to become, by the act, a body corporate and politic, upon the acceptance of the proposition of lease, and when the terms were agreed upon between the go.vernor and the leasing company, and their names entered on the minutes of the executive department. - The act guaranteed that the company should “ in no case be disturbed by the authority of the state so long as they keep the contract on their part, and make the payments when due.” The 11th section of the act is as follows: “That said lessees shall never charge a higher rate of local freights on said road than the average rate charged by the Georgia Railroad and Banking Company, the Central Railroad and Banking Company, and the Macon and Western Railroad Company, for like local freights over said roads. And said company shall have the same exemptions, privileges, immunities, rights and guarantees, and shall be subjected to the same liabilities, disabilities and public burdens of said railroad companies last mentioned, and no more, in all cases [430]*430where this act is silent, and has made no provision on the subject: Provided, the act shall not be construed to confer banking privileges on said company.”
The three roads mentioned in this section were, by their charters ,exempt from taxation beyond one-half of one per cent, on their net income. This exemption in two of those charters, those of the Central and Georgia Roads, were not, in October, 1870, subject to withdrawal. That in the charter of the Macon and Western was revocable, as it was given by the act of 1869. Under the act of 1870, the parties composing the Western and Atlantic Railroad Company proposed to take the lease at $25,000 00, monthly rental, complied with its other provisions, and the contract of lease was effected. On the 28th of February, 1874, the legislature passed an act requiring the presideiits of all the railroad companies in the state to return on oath to the comptroller general, the value of the property of their respective companies, * * * to be taxed as other property. Under the last act, it is claimed that the lessees of the State Road (the Western and Atlantic Railroad Company,) are liable to be taxed on the whole value of the road and its appurtenances, and the comptroller general issued a ji. fa. for such,'a tax. An affidavit of illegality was filed by the company to this ji. fa., which was overruled by the court below, and the company excepted.
1. The main point relied on to sustain the right of the state to impose this tax, notwithstanding the guarantee of the 11th section of the act of 1870, is that provision of the Code, section 1682, which enacts that “in cases of private charters hereafter granted, the state reserves the right to withdraw the franchise unless such right is expressly negatived in the charter.” By virtue of the power thus reserved to the state in this section of the Code, it is claimed that the exemption granted by the above recited 11th section of the leasing act is repealed by the act imposing.the tax complained of, and that the state had the right to repeal it. The power of the state so reserved, and as held in the cases of The Central Railroad and Banking Company, and of The Southwestern [431]*431Railroad vs. The State, decided at this term, is not denied; nor that the act' of 1874 may and does operate as a repeal of the exemption in the charter of those companies. Nor are the rulings in the case of The Union Branch Railroad Company vs. The East Tennessee and Georgia Railroad Company, 14 Georgia, 328, and in The West End Street Railroad Company vs. The Atlanta Street Railroad Company, 49 Georgia, 158, contested. But' the reasons for those 'decisions do not apply to the question involved in the case under consideration. That question, when brought to a single issue in this case is, does section 1682 of the Code make the guarantee or contract, or pledge, given in the lease act of 1870, as to how far the lessees may be taxed, revocable at the will of the legislature? Had there been no provision in that act making the leasing company a corporate body, no“question could arise, no one would claim that- any tax could be assessed beyond the limit set in the act, to-wit: one-half of one per cent, on its net income; for that is substantially what the guarantee means: 4 Wheaton, 418; 3 Wallace, 72; 13 Ibid., 266; 16 Ibid., 244. Does the fact that the lessees were required by the act to become a corporate body, take from them the right to claim that the terms of the bargain, the contract, were inviolable? The parties offering to take the lease had to make their proposition. That proposition it was necessary for the governor to accept, and to record his acceptance. The names of the persons proposing to take the lease were to be entered on the minutes of the executive department. All this was specially required by the act. When this was done, the act declares “that said persons shall then and from that time be and become a body corporate and politic for the term of twenty years,” etc. Becoming a corporation was an incident to the contract of lease. That contract was complete and perfect in all its parts when the above requisites were met. When all that was done and the contract thus perfected, the lessees were ipso facto to be and become a corporate body. If thus having corporate powers cast upon them, caused them to lose any guarantee as to taxation, Or in anywise af[432]*432fected such guarantee, would it not equally afibct any other right secured by the contract of lease, to-wit: the right to pay.only so much as was agreed upon as a monthly rental, or the right not to be disturbed by the state so long as they kept the cbntractand made the stipulated payments? What portion of the contract would not be repealable under such a construction? The provision that only a certain tax should be assessed, was as much a part of the contract of lease, as was the time that the lease was to run, or the stipulation as to disturbance, or any other pledge given in the act. The legal, necessity of the lessees becoming a corporate body as required by the leasing act, did not vitiate or in any wise lessen their rights under the contract. That was a condition the state put upon the lessees, to take effect after the acceptance of their proposition and the making of the proper record by the governor. To say that this carried all the-provisions of the leasing act — all the terms of the leasing contract, within the repealing power of the legislature, under section 1682 of the Code, would be to make an Aaron’s rod of the corporate feature of the act, and would establish a principle which would make all rights growing out of contracts with the state, revocable, provided corporate powers were in anywise conferred upon those to whom such rights were plighted, even though a price of great value may have been paid, to the state and was to continue to be paid as a consideration for the contract.
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Trippe, Judge.
By the act of October 24th, 1870, .the state proposed .to lease the Western and Atlantic Railroad for twenty years, for a sum not less than $25,000 00 per month, payable monthly. The lessees were to give bond in the sum of $8,000,000 00 for the performance of their-contract, and for the returñ of the road and its appurtenances at the expiration of the lease, in as good condition as when received by them. The lessees were to become, by the act, a body corporate and politic, upon the acceptance of the proposition of lease, and when the terms were agreed upon between the go.vernor and the leasing company, and their names entered on the minutes of the executive department. - The act guaranteed that the company should “ in no case be disturbed by the authority of the state so long as they keep the contract on their part, and make the payments when due.” The 11th section of the act is as follows: “That said lessees shall never charge a higher rate of local freights on said road than the average rate charged by the Georgia Railroad and Banking Company, the Central Railroad and Banking Company, and the Macon and Western Railroad Company, for like local freights over said roads. And said company shall have the same exemptions, privileges, immunities, rights and guarantees, and shall be subjected to the same liabilities, disabilities and public burdens of said railroad companies last mentioned, and no more, in all cases [430]*430where this act is silent, and has made no provision on the subject: Provided, the act shall not be construed to confer banking privileges on said company.”
The three roads mentioned in this section were, by their charters ,exempt from taxation beyond one-half of one per cent, on their net income. This exemption in two of those charters, those of the Central and Georgia Roads, were not, in October, 1870, subject to withdrawal. That in the charter of the Macon and Western was revocable, as it was given by the act of 1869. Under the act of 1870, the parties composing the Western and Atlantic Railroad Company proposed to take the lease at $25,000 00, monthly rental, complied with its other provisions, and the contract of lease was effected. On the 28th of February, 1874, the legislature passed an act requiring the presideiits of all the railroad companies in the state to return on oath to the comptroller general, the value of the property of their respective companies, * * * to be taxed as other property. Under the last act, it is claimed that the lessees of the State Road (the Western and Atlantic Railroad Company,) are liable to be taxed on the whole value of the road and its appurtenances, and the comptroller general issued a ji. fa. for such,'a tax. An affidavit of illegality was filed by the company to this ji. fa., which was overruled by the court below, and the company excepted.
1. The main point relied on to sustain the right of the state to impose this tax, notwithstanding the guarantee of the 11th section of the act of 1870, is that provision of the Code, section 1682, which enacts that “in cases of private charters hereafter granted, the state reserves the right to withdraw the franchise unless such right is expressly negatived in the charter.” By virtue of the power thus reserved to the state in this section of the Code, it is claimed that the exemption granted by the above recited 11th section of the leasing act is repealed by the act imposing.the tax complained of, and that the state had the right to repeal it. The power of the state so reserved, and as held in the cases of The Central Railroad and Banking Company, and of The Southwestern [431]*431Railroad vs. The State, decided at this term, is not denied; nor that the act' of 1874 may and does operate as a repeal of the exemption in the charter of those companies. Nor are the rulings in the case of The Union Branch Railroad Company vs. The East Tennessee and Georgia Railroad Company, 14 Georgia, 328, and in The West End Street Railroad Company vs. The Atlanta Street Railroad Company, 49 Georgia, 158, contested. But' the reasons for those 'decisions do not apply to the question involved in the case under consideration. That question, when brought to a single issue in this case is, does section 1682 of the Code make the guarantee or contract, or pledge, given in the lease act of 1870, as to how far the lessees may be taxed, revocable at the will of the legislature? Had there been no provision in that act making the leasing company a corporate body, no“question could arise, no one would claim that- any tax could be assessed beyond the limit set in the act, to-wit: one-half of one per cent, on its net income; for that is substantially what the guarantee means: 4 Wheaton, 418; 3 Wallace, 72; 13 Ibid., 266; 16 Ibid., 244. Does the fact that the lessees were required by the act to become a corporate body, take from them the right to claim that the terms of the bargain, the contract, were inviolable? The parties offering to take the lease had to make their proposition. That proposition it was necessary for the governor to accept, and to record his acceptance. The names of the persons proposing to take the lease were to be entered on the minutes of the executive department. All this was specially required by the act. When this was done, the act declares “that said persons shall then and from that time be and become a body corporate and politic for the term of twenty years,” etc. Becoming a corporation was an incident to the contract of lease. That contract was complete and perfect in all its parts when the above requisites were met. When all that was done and the contract thus perfected, the lessees were ipso facto to be and become a corporate body. If thus having corporate powers cast upon them, caused them to lose any guarantee as to taxation, Or in anywise af[432]*432fected such guarantee, would it not equally afibct any other right secured by the contract of lease, to-wit: the right to pay.only so much as was agreed upon as a monthly rental, or the right not to be disturbed by the state so long as they kept the cbntractand made the stipulated payments? What portion of the contract would not be repealable under such a construction? The provision that only a certain tax should be assessed, was as much a part of the contract of lease, as was the time that the lease was to run, or the stipulation as to disturbance, or any other pledge given in the act. The legal, necessity of the lessees becoming a corporate body as required by the leasing act, did not vitiate or in any wise lessen their rights under the contract. That was a condition the state put upon the lessees, to take effect after the acceptance of their proposition and the making of the proper record by the governor. To say that this carried all the-provisions of the leasing act — all the terms of the leasing contract, within the repealing power of the legislature, under section 1682 of the Code, would be to make an Aaron’s rod of the corporate feature of the act, and would establish a principle which would make all rights growing out of contracts with the state, revocable, provided corporate powers were in anywise conferred upon those to whom such rights were plighted, even though a price of great value may have been paid, to the state and was to continue to be paid as a consideration for the contract. It would befar more just and consistent with, principle and all recognized rules .of right, to say that the contract drew within itself the corporate powers of the lessees and made them a part of itself, and that this corporate faculty of,the company was so embodied in the contract as not to be itself revocable. . I say that this would be more reasonable arid accord more with all correct principle, than to hold that the mere making of the company a corporate body, would reduce great and important rights secured by the express terms o'f a solemn covenant which imposed weighty burdens and obligations, to temporary stipulations liable to be withdrawn at the will of one of the contracting parties. But it is not necessa[433]*433ry to go this far, that is, it is not necessary to hold that the part of the leasing act which makes the lessees a corporation, is not repealable. All that is requisite for the conclusion reached is to maintain that no specially guaranteed right or exemption given in the contract can be revoked — and that this is not the case of an ordinary charter granted ex gratia by the state which would -come within section 1682 of the Code. But rather is a direct express contract, formally agreed upon as other contracts by the two parties, with an express grant and guaranty by one party, and an equally express pi’omise to pay that party and to assume burdens by the other for the benefit of the first, and neither can without the consent of the other, annul, repeal or change the mutual stipulations of the covenant.
Ordinarily, a charter is obtained upon the application of the corporators, and it is a matter of grace or favor on the part of the state to grant it. Even such á charter is a contract, and no right given by it could be violated by hostile or repealing legislation, unless so reserved in the charter, or unless the law in force at the time, provided that it might be done. If by a general law, thus in force, a franchise may be withdrawn, (unless the right to withdraw is negatived in the charter,) the applicants know it and accept accordingly. In such cases there is no contract with the state except as expressed in the terms of the charter, and the power of the state over it is a part of it. A privilege is asked and granted, and it is accepted cum onore. But when the state, as a matter of public policy, desires its citizens (a majority of these lessees were required to be citizens of the state,) to make a contract with it in relation to a great public work, to take that work off the hands of the state — to pay at least $300,-000 00, annually, as a rental, in monthly installments,-to bind themselves to the extent of $8,000,000 00 to protect that property and to return it as received, when the lease expires, with other obligations upon them, and covenants in the very proposals it tenders as an inducement to get the contract accepted, that they shall enjoy certain exemptions, and bear only [434]*434a certain public burden, and then makes the further provision in its offer, that when all this is accepted, agreed upon and recprded, they, the acceptors of the state’s proposition, shall have east upon them a corporate existence, it surely cannot be that this last condition — a condition elected by the state of its own volition, and doubtless wisely done, shall be held to invalidate or weaken the covenants it had made, and put the power in the state to revoke the express guarantees of its contract. The terms of the contract were complete, and though the state required the lessees to be and become a corporate body, that did not make such a charter as destroyed the binding force of the guaranteed conditions of the lease. The right does not exist by the leasing act in one party to revoke a highly important stipulation in the contract, and at the same time to demand that the'other shall abide by and perform all the others. Again, it is said in section 1682, that in cases of private charters the right to withdraw the franchise is reserved to the state, “unless such right is expressly negatived in the charter.” Calling the whole of the lease act the charter, section lltli provides that “ said company shall have the same exemptions, privileges, immunities, rights and guarantees, and shall be subject to the same liabilities, disabilities and publio burdens, of said railroad companies last mentioned, (the Central, Georgia and Macon and Western,) and no more, in all eases where this act is silent, and has made no provision on the subject.” Now, we hold that under the term publio burdens, the right to tax is expressly asserted — to tax, in short, one-half of one per cent, of the net income. That is, the lease company shall be subject to be taxed to that extent, and shall have the same exemption, etc., of the other mentioned companies. If the act had declared, that these exemptions, and this limitation on its liability to taxation should be irrepealable or should never be infringed, it would be clear that the power to revoke would be expressly negatived. Is not the enactment that it shall be subject to be taxed a certain rate and no more, equally as strong a negative upon the right of the state to go beyond that limit during the term of the [435]*435lease, as the words suggested ? If a charter were granted for twenty years, with the additional words, which term shall not be lessened, would thosewords not be a negation of the right to revoke? When the guaranty to the Georgia Railroad was, that it should not be taxed beyond a given limit, and that guaranty was irrevocable, and the state made as a part of its terms of lease a guaranty that this lease company should be liable to be taxed as the Georgia Road and no more, was it not a grant of the limited exemption just as that road held it; that is, was not the guaranty as irrevocable in the one instance as in the other?
These last propositions are not given as legal convictions. They are rather thrown out as auxiliary suggestions, lending aid in support of the argument in favor of the judgment rendered. But it may be said, that they might be of no little force, if it were necessary to hold them, in order to protect a great and express contract from being swallowed up and losing its binding force, because one of the contracting parties assumed by force of law a corporate existence as an incident to or consequent of the contract.
2. We entertain no doubt that under the eleventh section of the lease act the Western and Atlantic Railroad Company may be taxed one-half of one per cent, on its net income. That was one of the public burdens to which the other three companies were subj.ect, and it is expressly made liable to the same. That the terms public burdens include taxes, it is not necessary to argue. The company paid this, and was liable to no more, and there was error in the judgment of the court below overruling the affidavit of illegality.
Judgment reversed.